Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 1 of 60

1 ROBBINS GELLER RUDMAN & DOWD LLP 2 SHAWN A. WILLIAMS (213113) MATTHEW S. MELAMED (260272) 3 EKATERINI M. POLYCHRONOPOULOS (284838) Post Montgomery Center 4 One Montgomery Street, Suite 1800 San Francisco, CA 94104 5 Telephone: 415/288-4545 415/288-4534 (fax) 6 [email protected] 7 POMERANTZ LLP JEREMY A. LIEBERMAN 8 600 Third Avenue New York, NY 10016 9 Telephone: 212/661-1100 212/661-8665 (fax) 10 [email protected] 11 Co-Lead Counsel for Plaintiffs 12 [Additional counsel appear on signature page.]

13 UNITED STATES DISTRICT COURT 14 NORTHERN DISTRICT OF CALIFORNIA

15 In re ELECTRONIC ARTS, INC. ) Master File No. 3:13-cv-05837-SI SECURITIES LITIGATION ) 16 ) CLASS ACTION ) 17 ) This Document Relates To: AMENDED CONSOLIDATED ) COMPLAINT FOR VIOLATIONS OF THE 18 ) FEDERAL SECURITIES LAWS ALL ACTIONS. ) 19 ) DEMAND FOR JURY TRIAL RYAN KELLY and LOUIS MASTRO, ) 20 Individually and on Behalf of All Others ) Similarly Situated, ) 21 ) Plaintiffs, ) 22 ) vs. ) 23 ) ELECTRONIC ARTS, INC., ANDREW ) 24 WILSON, BLAKE J. JORGENSEN, PETER ) ROBERT MOORE, and FRANK D. GIBEAU, ) 25 ) Defendants. ) 26 ) ) 27 28

983916_2 Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 2 of 60

1 TABLE OF CONTENTS 2 Page

3 INTRODUCTION ...... 1

4 SUMMARY OF THE ALLEGATIONS ...... 3

5 JURISDICTION AND VENUE ...... 8

6 PARTIES ...... 9

7 BACKGROUND TO THE CLASS PERIOD ...... 10

8 Description of the Company and the Battlefield Game Franchise ...... 10 9 A Successful Launch of Battlefield 4 During 3Q14 Was Crucial to EA’s Business and 3Q14 and FY14 Financial Results ...... 11 10 Defendants Knew that Battlefield 4 Would Have to Work on Next-Generation 11 Gaming Consoles to Meet Expectations They Had Set with Analysts and Investors ...... 13 12 Defendants Publicly Acknowledged Failures and Lessons Learned from Prior 13 Failed Game Launches ...... 13

14 EA Demonstrates Battlefield 4 Graphics and Action Sequences to Strong Reviews ...... 17 15 DEFENDANTS’ FALSE AND MISLEADING STATEMENTS AND OMISSIONS OF MATERIAL FACT ...... 19 16 Defendants Falsely Represent that EA Has “De-Risked” Battlefield 4’s 17 Technology Platform ...... 19 18 Reasons Why Defendants’ May 7, 2013, June 12, 2013 and July 23, 2013 Statements in ¶¶66, 73 and 77 Were Knowingly or Recklessly False and 19 Misleading: ...... 24 20 Battlefield 4 Launches for Existing Consoles and Defendants Falsely Represent that Their Next-Generation Launch Software Is Well Ahead of the Transition ...... 26 21 Reasons Why Defendants’ October 29, 2013 Statements in ¶¶85-86 Were 22 Knowingly or Recklessly False and Misleading: ...... 27 23 Gamers Begin to Play Battlefield 4 and Are Confronted by Debilitating Defects that Made the Game Unplayable ...... 29 24 Defects with Battlefield 4 for Next-Generation Consoles Begin to Become Known 25 and Defendants Concede Some Problems, but the Stock Price Remains Artificially Inflated ...... 34 26 Defendants Largely Concede the True Extent of Battlefield 4’s Defects and Stop 27 Production on All New Products Until the Game Is Fixed; Artificial Inflation Is Removed from Stock Price ...... 36 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - i -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 3 of 60

1 2 Page 3 Post-Class Period Revelations Underscore and Confirm the Inference of Knowing 4 Falsity ...... 38

5 DEFENDANTS’ SUSPICIOUSLY-TIMED INSIDER STOCK SALES ...... 42

6 THE PSLRA SAFE HARBOR DOES NOT APPLY ...... 44

7 CONTROL PERSON ALLEGATIONS...... 45

8 LOSS CAUSATION/ECONOMIC LOSS ...... 46 9 CLASS ACTION ALLEGATIONS AND THE FRAUD-ON-THE-MARKET PRESUMPTION ...... 47 10 COUNT I ...... 49 11 For Violation of Section 10(b) of the 1934 Act and Rule 10b-5 Against All 12 Defendants Except Jorgensen ...... 49

13 COUNT II ...... 50 14 For Violation of Section 20(a) of the 1934 Act Against Defendants Wilson, Jorgensen, Moore and Gibeau ...... 50 15 PRAYER FOR RELIEF ...... 51 16 JURY DEMAND ...... 52 17

18 19 20 21 22 23 24 25 26 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - ii -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 4 of 60

1 INTRODUCTION 2 Court appointed co-lead plaintiffs Ryan Kelly and Louis Mastro and plaintiff Manh Linh

3 Diep (collectively, “plaintiffs”), individually and on behalf of all others similarly situated, allege the 4 following based on personal knowledge as to plaintiffs and plaintiffs’ acts, and upon information and 5 belief as to all other matters based on the investigation conducted by and through plaintiffs’ 6 attorneys, which included, among other things, a review of U.S. Securities and Exchange 7 Commission (“SEC”) filings by Electronic Arts, Inc., as well as media and analyst reports about 8 9 Electronic Arts, Inc. and conference call transcripts. Plaintiffs believe that additional evidentiary

10 support will exist for the allegations set forth herein after a reasonable opportunity for discovery.

11 1. This is a securities class action on behalf of all persons who purchased or otherwise 12 acquired the publicly-traded common stock of Electronic Arts, Inc. (“EA” or the “Company”) 13 between May 8, 2013 and December 5, 2013, inclusive (the “Class Period”), against EA and several 14 of its officers and executives for violations of the Securities Exchange Act of 1934 (“1934 Act”) and 15 SEC Rule 10b-5 promulgated thereunder. Defendants are EA; Chief Executive Officer (“CEO”) and

16 director Andrew Wilson; Chief Financial Officer (“CFO”) Blake J. Jorgensen1; Chief Operating 17 Officer (“COO”) Peter Robert Moore; and President of EA Labels Frank D. Gibeau (collectively 18 “defendants”). 19 2. As alleged herein, the Amended Consolidated Complaint for Violations of the Federal

20 Securities Laws (“AC”) pleads detailed facts that address fully the deficiencies identified by the 21 Court’s October 20, 2014 Order Granting Defendants’ Motion to Dismiss Plaintiffs’ Consolidated 22 Class Action Complaint with Leave to Amend (Dkt. No. 45 ) (“MTD Order”). Among other things, 23 the AC provides the following additional facts: 24 25 26

27 1 Plaintiffs do not allege that Jorgensen violated §10(b) of the 1934 Act but contend that he is 28 liable as a control person under §20(a).

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 1 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 5 of 60

1 (a) Important context establishing that defendants’ false and misleading 2 statements alleged herein were, in fact, material to investors as they were specific, not vague 3 statements of immaterial puffery. 4 (b) The specific definition and industry usage for the word de-risk, which 5 defendants used repeatedly to falsely assure investors the Company had resolved development 6 deficiencies that had caused technical problems with prior game launches, and additional context 7 demonstrating that defendants’ use of the word de-risk was particularly well-understood and 8 important within the game development industry and to investment analysts who covered the 9 Company. See, e.g., ¶¶80-81. 10 (c) Allegations establishing that the Class Period misrepresentations were made 11 with requisite scienter, including a June 20, 2014 admission by defendant Wilson that Battlefield 4 12 was developed on an unfinished technology platform with unfinished software. ¶117. Wilson’s 13 post-Class Period admission, in combination with other detailed allegations pled herein, establish the 14 knowing or reckless falsity of defendants’ Class Period misrepresentations that Battlefield 4’s

15 technology platform was not largely de-risked at the times defendants represented they were. 16 Wilson’s admission also establishes that the game software development was not (and could not 17 have been) head and shoulders above prior console transitions, as defendants misrepresented.2 18 (d) The purchase of EA stock by a plaintiff, Manh Linh Diep, after defendants’ 19 October 29, 2014 alleged misrepresentations, thereby addressing the Court’s finding that lead 20 plaintiffs lacked standing to allege that defendants defrauded investors on October 29, 2014. ¶28; 21 MTD Order at 9-11. 22 3. These new facts taken together with those previously alleged are sufficient to allege 23 claims under the 1934 Act and the Private Securities Litigation Reform Act of 1955 (“PSLRA”). 24 25

26 2 While Plaintiffs’ Opposition to Defendants’ Motion to Dismiss the Consolidated Complaint for 27 Violations of the Federal Securities Laws (Dkt. No. 34) provided facts concerning Wilson’s June 20, 2014 admission, the Court specifically declined to consider the admission because it was not alleged 28 in the Consolidated Complaint. MTD Order at 5 n.6.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 2 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 6 of 60

1 SUMMARY OF THE ALLEGATIONS 2 4. EA develops, markets, publishes and distributes game software content and services. 3 During the Class Period, EA was the third-largest gaming company in the world in terms of 4 revenues. One of its most popular game franchises was Battlefield, which was developed by EA’s 5 wholly-owned game development studio, DICE. 6 5. In the year before the Class Period, the Company reported disappointing financial 7 results and launched a series of games that contained serious usability defects, which, together, 8 caused the Company to underperform against market expectations. See ¶¶38, 45-59, 62. In spite of 9 the past and then-current poor performance, investors entered 2013 very optimistic about EA’s 10 future prospects due to the expected release of the next version of its Battlefield franchise, Battlefield 11 4, and the planned introduction of next-generation gaming consoles manufactured by Sony and 12 Microsoft. See ¶¶39-44. 13 6. EA planned to develop Battlefield 4 simultaneously for both existing platforms, 14 comprising PCs, XBox 360 and PlayStation3, and next-generation consoles, Playstation4 (“PS4”) 15 and XBox One. Thus, the timing of the launch of Battlefield 4 in 3Q14 was crucial to FY14.3 A 16 successful execution of the Battlefield 4 launch would not only make the game available on next- 17 generation gaming consoles at the time of launch, it would also make the game available to 18 customers using five different gaming platforms during the Christmas sales season (which generated 19 98% of the Company’s EPS) and beat the next version of Battlefield’s biggest competitor, Call of 20 Duty, to market. 21 7. The Company publicly acknowledged that a successful Battlefield 4 launch was 22 “vitally important” to EA’s business and expected sales, and would represent a significant portion of

23 its revenues. Securities analysts concurred, reporting, for example, that Battlefield 4 was so 24 important “it could make a difference for EA’s valuation in the stock market.” ¶60.

25 3 EA reported on a fiscal year that ran from April 1 to March 31. As used herein “FY” stands for 26 fiscal year. Thus, FY14 means EA’s fiscal year 2014, which ran from April 1, 2013 to March 31, 2014. Specific quarters are designated by the quarter number followed by the letter Q. Thus, 3Q14 27 indicates EA’s third quarter in fiscal year 2014, which ran from October 1, 2013 to December 30, 2013. 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 3 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 7 of 60

1 8. While the Company primed investors for the launch of Battlefield 4 and the next- 2 generation console transition, some investors worried about a repeat of the Company’s failure to 3 successfully launch games during the last console transition and recent failed game launches of 4 Medal of Honor, The Simpsons Tapped Out (“The Simpsons”) and SimCity5 (“SimCity”). These 5 games launched with defects so pervasive that, among other things, the Company halted The 6 Simpsons from being sold for months and Amazon completely stopped selling SimCity until its 7 defects were fixed. ¶¶49, 52. Describing the Company’s March 2013 launch of SimCity, one 8 reviewer wrote that it “was a launch in the sense that people could buy the game, but less so in the 9 sense that they could play it.” ¶56. 10 9. In response to investor questions and concerns regarding those failed launches, 11 defendants represented that the Company had made significant “architectural changes” to handle 12 heavy demand on EA’s servers, that they had “created for all our games an infrastructure . . . to focus 13 on performance and reliability” before launch. ¶50. 14 10. During the Class Period, defendants falsely reassured investors, at investor and 15 industry conferences and in interviews with industry publications, that the Company had responded 16 to past failures by largely or completely de-risking Frostbite 3, the technology platform underlying 17 Battlefield 4. The Frostbite technology platform was the core pillar of the Battlefield franchise, the 18 “heart and brain” of the game. ¶36 n.4. Defendants falsely represented that, by de-risking Frostbite 19 3, they significantly reduced the development risks associated with Battlefield 4.

20  “[O]ur investment in Frostbite . . . has really put us in position where the technology side or the engine side of this transition has largely been derisked.” 21 (May 7, 2013.) ¶66.

22  “[W]e learned from [mistakes], and for this cycle, we have started early on . . . Frostbite 3, and derisk [sic] the technology engine component of making the 23 transition.” (June 12, 2013.) ¶73.

24  “So we wanted to de-risk the technology piece as much as possible. Frostbite has been the core difference. . . . [I]t makes for efficient and low-risk development.” 25 (July 23, 2013.) ¶77. 26 11. Just weeks before Battlefield 4 would launch on next-generation consoles, defendants 27 also falsely assured investors that the Company had executed the development of launch software for 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 4 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 8 of 60

1 next-generation games including Battlefield 4 so well this time that those games were head and 2 shoulders above where past transition games had been.

3  “[O]ur launch software this time is head and shoulders above where we were last time . . . . So we are certainly bullish as we come into this platform generation, 4 particularly as well as we have executed.” (October 29, 2013.) ¶86. 5 12. And defendants provided additional last-minute assurances that the launch of 6 Battlefield 4 would not be reminiscent of recent game launch and console transition failures, stating 7 that the next-generation games would be the best slate of transition games the Company had 8 released. Further, defendants falsely implied that because EA had worked so closely with next- 9 generation console manufacturers Microsoft and Sony throughout the process, the risks of a defect- 10 riddled game launch had been minimized.

11  “[W]e worked more closely with both Microsoft and Sony throughout the entire process, and the end result is, we have a launch slate of games that are the best 12 transition games that I’ve ever seen come out of this Company.” (October 29, 2013.) ¶85. 13 13. Unbeknownst to investors at the time, each of the statements was materially and 14 knowingly false when made and caused the Company’s stock price to trade at artificially inflated 15 levels. During the Class Period, EA’s stock price reached as high as $27.99, in an increase of $9.58 16 over the price of EA’s stock the day before the Class Period started. 17 14. Company insiders unloaded massive amounts of their EA holdings while the stock 18 price was artificially inflated by defendants’ false representations during the Class Period. ¶¶119- 19 123. Defendants Wilson, Moore and Gibeau sold a total of 701,959 shares of EA stock during the 20 Class Period for total proceeds of $17,059,848. ¶120. 21 WILSON DATE SHARES PRICE PROCEEDS % SOLD 22 5/9/13 32,085 $21.42 $687,261 7/25/13 20,000 $24.64 $492,800 23 7/26/13 40,000 $25.50 $1,020,000 7/30/13 15,000 $26.27 $394,050 24 CLASS PERIOD 107,085 $2,594,111 85% MOORE DATE SHARES PRICE PROCEEDS % SOLD 25 5/28/13 125,000 $23.14 $2,892,500 10/31/13 50,000 $26.49 $1,324,500 26 CLASS PERIOD 175,000 $4,217,000 25% 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 5 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 9 of 60

1 GIBEAU DATE SHARES PRICE PROCEEDS % SOLD 5/24/13 200,000 $22.77 $4,554,000 2 10/31/13 219,874 $25.90 $5,694,737 CLASS PERIOD 419,874 $10,248,737 48% 3 CLASS PERIOD (TOTAL) 701,959 17,059,848

4 15. On October 29, 2013 Battlefield 4 launched for existing game consoles and 5 consumers reported being met with game breaking defects:

6  “Game wont even start.” ¶90(a). 7  “The random freezing/crashing is making it unplayable.” ¶90(b). 8  “If you die, the game freezes entirely. Any attempts to reload also freeze, thus hinting at a corrupt save” ¶90(e). 9  “Massive rubber banding issues, random crash to desktop with looping sounds, 10 unstable servers.” ¶90(b). 11 16. On November 15, 2013 Battlefield 4 launched for new game consoles and almost 12 immediately reports surfaced of users being confronted with massive glitches and game breaking 13 defects. See ¶¶93-99. For example, gamers reported:

14  “I can’t play at all. Crashes as soon as I get past the main menu” ¶94. 15  “I’ve deleted the game data and reinstalled it twice. It lets me into one game and then crashes and then everything’s corrupt.” Id. 16  “I can’t get to the campaign/mp menu. Tried every possible fix.” Id. 17  “now i cant even get past the first screen. when it says press option to continue i do 18 that and the game freezes there.” Id. 19 17. These disclosures caused the Company’s stock price to decline from $25.96 on 20 November 14, 2013 to $21.54 on December 3, 2013 as the truth was partially disclosed. ¶100. 21 18. On December 4, 2013 defendants shocked investors with the disclosure largely 22 conceding that Battlefield 4 was so defective at launch that DICE would cease all future projects 23 until it was fixed:

24  “We know we still have a ways to go with fixing the game . . . we’re not moving onto future projects or expansions until we sort out all the issues with 25 Battlefield 4.” ¶103. 26 19. Immediately following defendants’ disclosure, Game Informer published a report 27 titled “EA Halts DICE’s Future Projects Pending Battlefield 4 Repair.” The reporter indicated his 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 6 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 10 of 60

1 belief that EA and DICE were aware of the problems earlier but chose to launch the game despite its 2 serious defects:

3  “I find it hard to believe the issues facing Battlefield 4 were a surprise to EA and DICE.” ¶106. 4 20. As a result of the disclosure on December 4, 2014, EA’s stock price declined 6% on 5 December 5, 2013 to close at $21.01 on high volume of more than 12 million shares traded. ¶107. 6 The same day, Forbes reported that investors’ reaction was understandable given the extensive 7 problems with Battlefield 4 and the ripple effect on other games: 8  “The reaction from Wall Street was understandable, given not only extensive 9 problems with one of EA’s signature games, but also the ripple effect it could have through their lineup.” ¶108. 10 21. Facts disclosed and reports issued after the Class Period, including admissions by 11 defendant Wilson, further establish and corroborate the allegations of falsity and scienter. The 12 launch of Battlefield 4 would prove to be plagued by defects and execution shortfalls of the very 13 kind EA falsely claimed to have cured. See ¶¶66, 73, 77; see also ¶¶50, 55. The Battlefield 4 launch 14 differed from the Medal of Honor, The Simpsons, and SimCity launches only in that Battlefield 4 was 15 more important to the Company and the defects more severe. As reporters and industry participants 16 observed: 17  “EA and DICE haven’t simply released a broken game. They have cracked the 18 foundation of the brand and driven a wedge between themselves and a loyal fan base.” ¶115. 19  “Battlefield 4 was barely operational for months after its original launch.” ¶116. 20  “[T]he fact remains that EA sold a fundamentally broken product for $60 and still 21 haven’t quite been able to make it work. It’s like selling a chair with one leg and sending each customer one extra leg to make up for it.” Id. 22 22. On the June 20, 2014, Wilson admitted the ostensibly de-risked technology platform 23 that would solve prior launch and transition failures was actually unfinished during Battlefield 4’s 24 development, which was a significant cause of what he called Battlefield 4’s unacceptable launch. 25  “[W]hen you are building a game on an unfinished platform with unfinished 26 software, there are some things that can’t get done until the very last minute because the platform wasn’t ready to get done.” ¶117. 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 7 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 11 of 60

1 23. The chart below illustrates the timing of events, misrepresentations and insider stock 2 sales during the Class Period and compares the Company’s share price performance to its peer group 3 as defined by the Company’s SEC filings. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

19 JURISDICTION AND VENUE 20 24. Jurisdiction is conferred by §27 of the 1934 Act. The claims asserted herein arise 21 under §§10(b) and 20(a) of the 1934 Act and SEC Rule 10b-5. 22 25. Venue is proper in this District pursuant to §27 of the 1934 Act. Most of the false 23 and misleading statements, omissions and fraudulent conduct occurred and originated in this District. 24 EA has a substantial presence in California, and its principal executive offices are located in 25 Redwood City, California. 26 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 8 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 12 of 60

1 26. In connection with the acts alleged herein, defendants, directly or indirectly, used the 2 means and instrumentalities of interstate commerce, including, but not limited to, the mails, 3 interstate telephone communications and the facilities of the national securities markets.

4 PARTIES 5 27. Co-lead plaintiffs Ryan Kelly and Louis Mastro purchased Electronic Arts common 6 stock during the Class Period and were damaged by the conduct alleged herein. 7 28. Plaintiff Manh Linh Diep purchased Electronic Arts common stock during the Class 8 Period on November 14, 2013 and November 15, 2013 and was damaged by the conduct alleged 9 herein. Diep's certification setting forth his Class Period transactions in EA common stock is 10 attached hereto. 11 29. Defendant EA, headquartered in Redwood City, California, develops, markets, 12 publishes and distributes game software content and services. During the Class Period, Electronic 13 Arts had more than 300 million shares of common stock outstanding. The shares traded on the 14 NASDAQ under the ticker symbol “EA.” 15 30. Defendant Andrew Wilson is, and was throughout the Class Period, an executive of 16 EA. Wilson assumed the positions of CEO and director of the Company effective September 15, 17 2013. Before then, Wilson had been the Executive Vice President of the EA SPORTS operating 18 division of EA since August 2011. In that role, Wilson had responsibility for the product 19 development, worldwide product management, and marketing for all packaged goods and online 20 offerings for EA SPORTS. 21 31. Defendant Peter Robert Moore is, and was throughout the Class Period, EA’s COO. 22 In that role, Moore provides strategic leadership to EA’s global operations, which enables EA to 23 bring products to market via retail and digital direct-to-consumer channels, including publishing, 24 sales, media, central development, and channel management. Moore also oversees EA’s global 25 marketing organization. Before being named EA’s COO, Moore was President of EA SPORTS 26 from September 2007 to August 2011. Before that, in reverse chronological order, Moore was 27 Corporate Vice President of the Interactive Entertainment Business of Microsoft Corp., President 28 and COO of SEGA of America, and Senior Vice President of marketing at Reebok International Ltd.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 9 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 13 of 60

1 32. Defendant Frank D. Gibeau is, and was throughout the Class Period, President of EA 2 Labels. He was promoted to that role on August 4, 2011. As President of EA Labels, Gibeau leads 3 the Company’s development activities, including product development, worldwide product 4 management of packaged goods and online offerings. Gibeau was Senior Vice President of North 5 American Marketing of EA from 2002 to September 2005, when he was promoted to Executive Vice 6 President and General Manager of North American Publishing of EA. He served in the latter role 7 until he was promoted to President of EA Labels. 8 33. Wilson, Moore and Gibeau are referred to collectively herein as the “individual 9 defendants.” 10 34. Defendant Blake J. Jorgensen is, and was throughout the Class Period, EA’s CFO and 11 Executive Vice President. The Board of Directors hired Jorgensen for those roles in September 12 2012. From July 1, 2009 to August 17, 2012, Jorgensen worked in the same capacities at Levi 13 Straus & Co. From June 4, 2007 to July 1, 2009, Jorgensen was CFO of Yahoo! Inc. Before 14 working at Yahoo!, Jorgensen co-founded Thomas Weisel Partners LLC and served as its COO.

15 BACKGROUND TO THE CLASS PERIOD 16 Description of the Company and the Battlefield Game Franchise 17 35. EA is a multinational developer, marketer, publisher, and distributor of video games. 18 It was founded and incorporated on May 28, 1982, and focuses on the development and distribution 19 of games for home computers. EA is currently the world’s third-largest gaming company by 20 revenue after Nintendo and Activision Blizzard (“Activision”). 21 36. Prior to and during the Class Period, EA developed and published games under 22 several “labels” and owned and operated numerous gaming studios. Among the studios EA owned 23 was DICE, which was founded in 1992 and is based in Stockholm, Sweden. DICE was the studio 24 responsible for the ongoing development of Battlefield, one of EA’s two most lucrative game 25 franchises. DICE is also responsible for the development of the technology platform Frostbite, 26 which was developed for the Company’s Battlefield franchise.4

27 4 28 According to Frostbite’s website, Frostbite is a technology platform, also called a technology engine, game engine or game platform, initially created by DICE for development of Battlefield Bad 983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 10 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 14 of 60

1 37. The Company’s Battlefield franchise is a series of first-person shooter video games 2 that was enormously popular with gamers. By 2012, the series – including 11 games and 12 3 “expansion packs”5 – had reached more than 50 million players. The first Battlefield game, 4 Battlefield 1942, was released in 2002 and was designed to be played on computers running 5 Microsoft Windows or Apple OS X (together referred to herein as PCs). Battlefield 2: Modern 6 Combat, which was released in 2005, was the first game in the franchise to be developed and sold 7 for users on gaming consoles PlayStation 2 and Xbox, which were manufactured by Sony and 8 Microsoft, respectively. Battlefield: Bad Company 2, released in 2010, was the first game in the 9 franchise to be developed and sold for Sony and Microsoft gaming consoles and PCs. 10 A Successful Launch of Battlefield 4 During 3Q14 Was Crucial to EA’s Business and 3Q14 and FY14 Financial Results 11 38. From June 2012 through late January 2013, the Company’s stock price hovered 12 mostly between $12 and $15 per share due in part to a series of poor results and problematic product 13 launches. For example, on July 31, 2012, EA announced that its 1Q13 revenues were negatively 14 affected because the Company’s game The Secret World did not meet its anticipated 1Q launch date. 15 On October 30, 2012, EA reduced FY13 EPS guidance by $0.05 due to weakness associated with the 16 botched production of the Company’s game Medal of Honor. On January 30, 2013, EA announced 17 3Q13 revenues below expectations and guidance, “a result primarily of a miss with our Medal of 18 Honor title.” 19 20 21 Company. In an article published on October 28, 2013, the eve of Battlefield 4’s launch, industry 22 publication MMGN described Frostbite as the “core pillar of the Battlefield experience.” Technology platforms such as Frostbite provide a software development toolkit addressing all 23 aspects of game development. As industry publication The Gameological Society explained in a June 11, 2013 article titled “What’s a game engine, and why does EA want you to care about it?” a 24 technology platform such as Frostbite “is like the heart and brain of a game.” Industry publication Endgaget published an article on November 19, 2013 titled “From Battlefield to Mass Effect: How 25 one engine is shaping the future of EA Games,” summarizing the role of Frostbite thus: “Like a car’s motor, it’s the heart of what pushes the game down the road.”

26 5 Expansion packs are additions to existing games, which can involve new game areas, weapons, 27 objects, or storylines to complete the already-released games. Expansion packs usually consist solely of additional content and require the original game in order to play. Expansion packs cost 28 substantially less than the original game.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 11 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 15 of 60

1 39. On January 30, 2013, during an earnings conference call to discuss EA’s 3Q13 2 results, Moore emphasized that “Battlefield, along with FIFA, is now in position to become one of 3 the top two or three game franchises in the industry.” EA’s then-CEO John Riccitiello 4 (“Riccitiello”) called Battlefield a proven blockbuster: “We have the biggest brands. FIFA and 5 Battlefield are proven blockbusters. They just keep growing and getting better. I believe that in the 6 next four years both will be among the top franchises that define the industry across all platforms 7 and geographies . . . .” 8 40. An analyst on the January 30, 2013 call asked whether just two of EA’s franchises, 9 Battlefield and FIFA, “represent substantially all, if not more, of the profit of the Company at least 10 over the last year or two.” Riccitiello agreed and called the games “vitally important” to EA:

11 [Y]ou are correct that titles at the scale of FIFA and Battlefield are what drive the profitability inside of EA . . . . 12 * * * 13 We think Battlefield and FIFA are going to help us lead as we move into 14 the next set of technology opportunities and platform opportunities and continue to get bigger. 15 So you are right to believe that FIFA and Battlefield are vitally important to 16 us. 17 41. Securities analysts reported that EA’s future profitability depended on Battlefield 4 18 and the next-generation console transition. For example, on January 31, 2013, BMO Capital 19 Markets issued a report stating: “With a portfolio of strong franchises and key upcoming catalysts 20 that include next-generation consoles and Battlefield 4, we anticipate strong profitable growth for the 21 company in FY2014.” On the same date, Cowen and Company also issued a report titled “EA clears 22 the decks, setting up Cycle Trade” that focused on the importance of Battlefield to EA’s growth: 23 “FY14 [is] likely to enjoy growth driven by the next ‘Battlefield’ title.” Also on January 31, 2013, 24 Wedbush Securities issued a report titled “Q3 EPS In Line, Despite Weak Revenue; FY:13 Guide 25 Lowered from Fuse Delay, but Our FY:14 EPS Estimate Remains; Maintaining OUTPERFORM

26 Rating, $23 PT” which quantified the anticipated impact of Battlefield 4: “Battlefield 4 should 27 account for $400 million or more of revenue growth by itself, and EA can hit our [FY14] revenue 28 estimate even if the rest of the lineup sees sales down 20% compared to FY:13.”

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 12 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 16 of 60

1 Defendants Knew that Battlefield 4 Would Have to Work on Next-Generation Gaming Consoles to Meet Expectations They Had Set with Analysts and Investors 2 42. Key to the development of Battlefield 4 was defendants’ knowledge that it had to be 3 designed and developed to perform not only on existing platforms but also on next-generation 4 gaming consoles from Sony and Microsoft. Defendants and investors were focused on the 5 importance of next-generation consoles to EA’s projected revenues and profits. Sony unveiled the 6 PS4 on February 20, 2013. Microsoft unveiled the Xbox One on May 21, 2013. Both were 7 scheduled to be available in the fall of 2013.6 8 43. Not only did defendants highlight the significant opportunity next-generation 9 consoles presented in the run-up to the Class Period, including during their 3Q13 investor call on 10 January 30, 2013, but analysts also emphasized the importance of the next version of Battlefield 11 working on the next-generation consoles. 12 44. For example, a March 19, 2013 Janney Capital Markets report titled “Thoughts on 13 CEO Change & Q4 Weakness” summarized the importance of the next-generation transition and 14 Battlefield 4 to EA’s FY14 prospects. The report specifically noted that investors were focused on 15 the boost to be delivered by the Company’s smooth transition to Battlefield 4 on next-generation 16 consoles: 17 All eyes on transition and BF4. “A clean slate for FY14”. With the stock up 18 30% YTD (and up after hours), investors are squarely focused on the potential positive lift from the next gen console cycle. Recent CFO commentary suggests that 19 EA expects a smoother transition namely from (1) cheaper build costs for PS4 and its more “pc-like” architecture and (2) lower R&D costs required to transition to next 20 consoles given significantly fewer SKUs and game engines. EA has a potential key product catalyst in 2H with the expected launch of Battlefield 4 against an easy 21 Medal of Honor comp[arison] yet there is other key competition with GTA and Call of Duty. 22 Defendants Publicly Acknowledged Failures and Lessons Learned from Prior Failed Game 23 Launches 24 45. While analysts, media, and customers were excited by the prospect of Battlefield 4 25 and the next-generation consoles, they were concerned about EA’s lengthy history of failed game 26 launches, which led to Riccitiello’s resignation on March 18, 2013.

27 6 Sony’s PS4 was released on November 15, 2013. Microsoft’s Xbox One was released on 28 November 22, 2013.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 13 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 17 of 60

1 46. Medal of Honor: For example, on January 31, 2013 defendants blamed the earlier 2 3Q13 earnings and guidance miss in large part on the “miss with our Medal of Honor title.” On 3 February 12, 2013, gaming website Rock, Paper, Shotgun published an interview with EA’s Chief 4 Creative Director Rich Hilleman in which he described “execution” problems that led to Medal of 5 Honor’s inability to live up to the Company’s, investors’, and customers’ expectations. 6 Electronic Arts has come out to say Medal of Honor: Warfighter failed to make a mark due to “execution” problems during its development . . . . EA chief 7 creative director Rich Hilleman said the game’s problems stemmed from EA’s production of the game and not any external factors. 8 . . . “It’s an execution problem. . . . [W]e had some things we should’ve done 9 better.” 10 47. Hilleman also explained that EA’s “Fewer, Bigger, Better” strategy meant the 11 Company was even more reliant on the success of Battlefield 4. “‘What we think right now is that, 12 for the next couple years, we can just have one great thing in that space,’ he added. ‘So we’re 13 choosing for it to be Battlefield.’” As defendants would later admit, however, Battlefield 4 also 14 launched with problems stemming from EA’s production of the game. ¶117. 15 48. In addition to the risks associated with a repeat of the execution failures that affected 16 the launch of Medal of Honor, defendants, analysts, investors and consumers understood there would 17 be strong competition from the expected simultaneous release of the next version of Activision’s 18 Call of Duty franchise. On February 12, 2013, in a blog posting titled “EA explains why [Medal of 19 Honor] came up short” that discussed the Rock, Paper, Shotgun article, a Battlefield customer 20 responded with the following warning: “They better not rush Battlefield 4 [just] because the new 21 Call of Duty will be out around the same time!” 22 49. The Simpsons: Another example of a failed EA game launch was The Simpsons

23 Tapped Out (“The Simpsons”). The Simpsons launched for iOS (Apple mobile) devices on March 1, 24 2012. At launch, users overwhelmed servers and reported numerous serious defects. EA pulled the 25 game from the iOS App Store on March 5, 2012 and did not re-launch it for several months. 26 50. On February 26, 2013, EA Chief Technology Officer (“CTO”) Rajat Taneja 27 addressed the failed launch of The Simpsons at the Morgan Stanley Technology, Media & Telecom 28 Conference. Taneja explained that in response to the botched launch, the Company had learned how

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 14 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 18 of 60

1 to test and launch games and had created an infrastructure to test games on performance and 2 reliability at scale to prepare for the impact of live play: 3 [Analyst:] You mentioned The Simpsons. . . . I remember The Simpsons coming out and having – a lot of people tried to play the game, and then I think you had to 4 pull it because of technical issues. . . . 5 [Taneja:] Absolutely. The Simpsons Tapped Out was – the launch of that game was a character-building exercise for us . . . . 6 * * * 7 And we had a couple of mistakes in the launch. One was we didn’t cater to the sort 8 of demand that game would generate, so our infrastructure itself was not geared for the kinds of daily active users, and, more importantly, the concurrency of usage that 9 would take place. So, there has been a lot of learnings we have had in not just making sure that we build the right infrastructure for every game . . . . And we are 10 making architectural changes on the very fundamental level around that. 11 We also learned a lot about the way we launch our games, the way we test them and the way we get ready to launch the games. And we have created for all 12 our games an infrastructure now where we run it through its paces for several weeks before it goes live to focus on scale, to focus on performance and reliability, 13 to stress that – and to see all the impacts that would happen in game play at the level of demand that we are now expecting to get. 14 51. While defendants had primed investors to believe that EA had fully addressed the 15 risks that materialized in past technical development deficiencies and failed product launches, as set 16 forth below in ¶¶66, 73, 77, 85, 86, EA did not and could not have run Battlefield 4 through its paces 17 under live play circumstances because the next-generation consoles were not completed in time to do 18 so and the Company had not provided sufficient resources or time to adequately test the game. ¶¶92, 19 112, 117. 20 52. SimCity: Yet another failed launch, this time of SimCity, occurred just before the 21 Class Period. Prior to SimCity’s March 5, 2013 launch, EA and the game’s development studio 22 Maxis made numerous statements similar to those that defendants would later make about Battlefield 23 4 regarding lessons learned from prior defective launches.7 But the SimCity launch was a “disaster.” 24 On March 7, 2013, Amazon pulled the SimCity from its website and refused to sell it until EA had 25 addressed the game’s technological deficiencies. 26 27

7 28 Maxis, like DICE, is a development studio owned by EA.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 15 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 19 of 60

1 53. A March 18, 2013 article on gaming website Kotaku titled “Your Complete Guide to 2 the SimCity Disaster” recounted the development and launch of SimCity. The run-up to SimCity’s 3 launch was notable for the Company’s reassurance to investors and customers that it was focused on 4 responding to earlier launch “debacle[s].” The March 18, 2013 article quoted current EA Senior 5 Vice President Lucy Bradshaw (“Bradshaw”) as saying, “This is easily the most ambitious game in 6 the franchise and we’ve taken great care to make sure that every line of code embodies the spirit of 7 the series. To do this, we knew we had to make sure we put our heart and souls into the simulation 8 and the team created the most powerful simulation engine in its history, the GlassBox Engine.”8 9 54. SimCity’s launch, however, was so disastrous that on March 7, 2013 Amazon pulled 10 SimCity from being sold on its website, preventing would-be buyers from purchasing the game until 11 EA fixed it. The disastrous SimCity launch resulted from the very game engine the Company had 12 earlier proclaimed the very foundation of the game’s ambition. On March 9, 2013, Bradshaw 13 revealed that “many of our issues were related to how [the] GlassBox [technology engine] managed 14 the vast amount of simulation data through its database.” As the March 18, 2013 article reported, the 15 GlassBox Engine, which EA had lauded as “‘the most powerful simulation engine’” in the Maxis 16 team’s history, “had some issues.” 17 55. The Company pledged to investors and customers that it had learned from SimCity’s 18 disastrous launch and that next time would be different. Bradshaw listed “valuable lessons” learned 19 from the disastrous launch, including that “‘online launches are very complex and a game that is an 20 open sandbox simulation can lead to a wider variety of scenarios we need to test for!’” 21 56. SimCity launched “fundamentally broken in a lot of different ways.” As an April 9, 22 2013 article at online game website Geekosystem summarized: “[I]t was a launch in the sense that 23 people could buy the game, but less so in the sense that they were able to play it.” 24 57. Analysts were thus concerned about EA’s history of failed game launches. On 25 January 31, 2013, a Wedbush Securities report focused on the fact that the Company’s strategic 26

27 8 At the time, Bradshaw was General Manager of Maxis. On October 2, 2013, EA announced that 28 she had been promoted to Senior Vice President and would report directly to CEO Wilson.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 16 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 20 of 60

1 decision to release fewer but bigger games opened the door to “a handful of misses” having “a large 2 impact on top-line growth and profitability.” 3 The company’s “Fewer, Bigger, Better” strategy for its key packaged goods releases will not work if the games are, in fact, not “Better.” The strategy entails a 4 more streamlined packaged goods release slate with higher quality games that generate revenue growth from increased sales to cost-conscious consumers. . . . As 5 the importance of each release to financial results is heightened by this strategy, a handful of misses can have a large impact on top-line growth and profitability. 6 58. On January 31, 2013, Kotaku published an article titled “The Most Obvious Thing 7 Anyone Can Say About EA Needs To Be Said Anyway,” i.e., that “EA’s ‘Fewer, Bigger, Better’ 8 strategy for its key packaged goods releases will not work if the games are, in fact, not ‘Better.’” 9 The article proceeded to list some successful EA games, but concluded by saying that Battlefield 4 10 better be amazing: “EA does make some clunkers. But it’s not all bad. Not by a long shot. EA’s 11 FIFA is considered top-shelf. NHL’s a winner. Need for Speed: Most Wanted was amazing. . . . 12 Battlefield 4 better be. You can do it, EA! Right?” 13 59. A March 20, 2013 article focused titled “Electronic Arts: Your Next Move” published 14 on TheStreet.com focused on the need for EA to up its game on quality control to make up for its 15 history of poor performance: 16 It is going to take another ground-breaking game franchise to pull this 17 company back up to its former glory. That means Electronic Arts needs to focus on getting good people on research and development, to make sure that the game has 18 mass appeal. 19 * * * 20 Electronic Arts is going to need to up its game on quality control as well, and possibly up its entire value proposition, if it is going to make up for its recent poor 21 performance. 22 EA Demonstrates Battlefield 4 Graphics and Action Sequences to Strong Reviews

23 60. On March 26, 2013, EA introduced Battlefield 4 at an invite-only event during the 24 Games Developer Conference in San Francisco, California. The unveiling was simulcast in 25 Stockholm, where DICE was headquartered, and comprised a 17-minute live demonstration of the 26 game’s “campaign” (i.e., single-player) mode. The same day, VentureBeat lauded the demonstration 27 and stated that Battlefield 4 is “so important that it could make a difference for EA’s valuation in the 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 17 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 21 of 60

1 stock market,” but cautioned that if EA “messes the game up,” it would lose in the battle for 2 consumers. 3 Battlefield 4 represents a huge investment by EA in a video game that feels like a next-generation experience . . . . This kind of game – coming this fall – is so 4 important that it could make a difference for EA’s valuation in the stock market. 5 If EA messes the game up, as it did with last fall’s Medal of Honor: Warfighter first-person shooter last year, then it will lose another battle for 6 consumers with rival Activision Blizzard. But if it pulls Battlefield 4 off flawlessly, it could sell millions more units than its predecessor did and take some market share 7 from rival Call of Duty. 8 61. On March 28, 2013, Cowen issued an analyst report titled “What’s Next? Figuring 9 Out FY14” that focused on EA’s evident belief that it would sell more units of Battlefield 4 than the 10 prior iteration of the game due to “the impressive-looking Frostbite 3 engine.” Frostbite 3 was 11 developed to first be used with Battlefield 4. 12 62. On April 1, 2013, UBS Research issued a report titled “Console Transition; 13 Management Changes” focusing on EA’s history of problems launching games, specifically listing 14 some of the Company’s most recent “miscues on some of its core franchises,” including SimCity: “In 15 recent years, Electronic Arts has been riddled with operational miscues on some of its core 16 franchises and in attempts to launch new globally scaled IP into the marketplace.” UBS listed as an 17 investment risk the Company’s potential failure “to release successful titles for the new console 18 cycle,” which may negatively impact results.9 19 63. Thus, by the beginning of the Class Period, defendants knew that: (1) Battlefield 4 20 would provide a significant amount of EA’s future revenues and profits; (2) Battlefield 4 would need 21 to launch successfully with the next-generation consoles; (3) EA had numerous problems launching 22

23 9 24 EA’s history of failed game launches was a significant part of what led Consumerist’s readers to vote EA the Worst Company in America in 2012 and 2013. On April 5, 2013, Moore responded to 25 EA receiving the 2013 “award.” 26 Are we really the “Worst Company in America?” I’ll be the first to admit that we’ve made plenty of mistakes. These include server shut downs too early, games 27 that didn’t meet expectations, missteps on new pricing models and most recently, severely fumbling the launch of SimCity. We owe gamers better performance than 28 this.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 18 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 22 of 60

1 games successfully in the past; and (4) investors were concerned about whether the Company’s past 2 problems launching games would continue with Battlefield 4.

3 DEFENDANTS’ FALSE AND MISLEADING STATEMENTS AND OMISSIONS OF MATERIAL FACT 4 Defendants Falsely Represent that EA Has “De-Risked” Battlefield 4’s Technology Platform 5 64. On May 7, 2013, the Company issued a press release announcing its 4Q and FY13 6 results. Revenue came in at $1.040 billion, below the midpoint of the Company’s guidance range of 7 $1.025 billion to $1.125 billion, and EPS was $0.55, below the guidance range of $0.57 to $0.72. 8 65. After market close on May 7, 2013, defendants hosted EA’s 4Q13 and FY13 earnings 9 conference call for analysts and investors. EA’s interim CEO Larry Probst, Jorgensen, Gibeau, 10 Moore and V.P. of Investor Relations Rob Sison represented EA on the call. Defendants announced 11 that they planned to release 11 major titles in FY14, five of which, including Battlefield, were being 12 developed for next-generation consoles. 13 66. False and Misleading Statement: During the call, analysts inquired about the 14 Company’s transition to the next-generation gaming consoles. Gibeau falsely represented that the 15 problems causing past botched launches had been addressed and corrected because the technology 16 side of the transition had largely been “de-risked” due to EA’s investment in the technology 17 platforms including Frostbite. 18 [Analyst:] The technology leap we are about to see, that you mentioned, how does 19 that compare to what we’ve seen in the past? . . . 20 * * * 21 [Gibeau:] Yes, . . . in comparison to last transition, we’re in a much better state as a company in terms of our development. . . . [O]ur investment in Frostbite and EA 22 SPORTS over the last year has really put us in a position where the technology side or the engine side of this transition has largely been de-risked. 23 67. On May 7, 2013, the Wall Street Journal reported that EA’s “current quarter looks to 24 be a tough one” but noted that the Company’s projections for FY14 profits sent the stock up “8% in 25 after-hours trading.” The article reported an interview with Jorgensen, who stated “that part of the 26 company’s bullish outlook was driven by strong demand for its latest war-simulation shooting game, 27 ‘Battlefield 4,’ which the company unveiled last month. ‘Pre-orders are through the roof,’ he said.” 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 19 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 23 of 60

1 68. On May 7, 2013, VentureBeat published a review of EA’s investor call, noting 2 Gibeau’s statement that the new technology platforms would help de-risk the console transition 3 against the backdrop of previous misses on the product front during the March quarter. The article 4 also noted Gibeau’s promise that problems related to the SimCity launch would not happen again. 5 69. On May 8, 2013, the Wall Street Journal cited the heightened importance of 6 Battlefield 4 and the next-generation consoles to EA’s future prospects resulting from the 7 Company’s decision to release fewer games: 8 Its strategy of focusing on a few proven franchises, such as FIFA and Battlefield, means it will go to only making 11 games in fiscal 2014 from making 70 to 80 a year 9 five years ago. Fewer games means fewer people needed to make and market them. 10 70. Following EA’s May 7, 2013 investor conference call, investors boosted EA’s stock 11 price from a close of $18.41 on May 7, 2013 to a close of $21.56 on May 8, 2013, an increase of 12 17%, despite the Company’s poor FY13 results and continued weak near-term outlook. 13 71. On May 21, 2013, EA announced that Battlefield 4 would be released for existing PC, 14 XBox 360 and PlayStation3 platforms on October 29, 2013, and would be available on the next- 15 generation consoles from Sony and Microsoft when they launched. 16 72. On June 10, 2013, EA demonstrated Battlefield 4 on the next-generation Xbox One at 17 the Electronic Entertainment Expo (“E3”) Conference in Los Angeles, California. EA first 18 demonstrated Battlefield 4’s single-player mode during Microsoft’s media briefing introducing the 19 Xbox One and later hosted a live demonstration of multi-player mode, with 64 players in one 20 location playing a limited version of the game over a local network. 21 73. False and Misleading Statement: On June 12, 2013, EA hosted an investor breakfast

22 at the E3 Conference. Representing EA at the breakfast were Jorgensen, Gibeau, Moore, Taneja, 23 and Sison. An audience member asked whether EA had learned from past console transitions 24 mistakes making bets on which platform would succeed. Moore falsely stated that past mistakes 25 would not happen again this time because EA had de-risked the technology engine underlying the 26 transition games. 27 [Audience Member]: One of the things that tripped you guys up a little bit during the last console transition was ultimately making bets on which consoles were going to 28 succeed, and which weren’t. . . .

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 20 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 24 of 60

1 [Moore]: I’ll start on that. I might characterize the last transition slightly differently, which is I think we made mistakes in technology management that put us a little bit 2 behind where we wanted to be. We tried to deploy a different kind of technology at the time called RenderWare that didn’t work. And we learned from that, and for 3 this cycle, we have started early on Ignite and on Frostbite 3, and derisk the technology engine component of making the transition. 4 So from the standpoint of picking the wrong platforms, I think we did a 5 good job there but we’ve mismanaged the technology. That’s not happening this time around. 6 74. On July 23, 2013, EA issued a press release announcing its 1Q14 financial results. 7 The press release quoted Probst, who stated that “‘We are also executing on a clear set of goals for 8 leadership on mobile, PC, current and next generation consoles,’” and highlighted that Battlefield 4 9 won 21 awards at E3, including Game Spot’s Best of E3 award. 10 75. Later the same day, defendants hosted EA’s 1Q14 earnings conference call for 11 analysts and investors. Probst, Jorgenson, Moore, Gibeau, and Sison represented EA on the call. 12 During the call, Moore highlighted consumers’ anticipation of the next-generation consoles and the 13 strength of preorders for Battlefield 4, which were higher than they were for Battlefield 3 at the same 14 time prior to launch and credited Gibeau for having done brilliantly with the game’s development. 15 Gibeau addressed developmental innovation and the opportunities provided by the next-generation 16 consoles. And Jorgensen stated “a big Battlefield is obviously important to us” and “we’re very 17 focused on that.” 18 76. False and Misleading Statement: On the same day, industry publication GamesBeat 19 published an interview with Gibeau titled “EA exec Frank Gibeau: Betting on next-gen consoles, 20 mobile, and doing right by consumers.” Gibeau stated that he had been working intensely on 21 Battlefield 4 for next-generation consoles for the past two years. 22 77. In the interview, Gibeau falsely represented that EA had responded to past failures by 23 adopting a “proven technology” platform, Frostbite, for the transition, which had de-risked the 24 technology piece of next-generation game development. 25 GamesBeat: It seemed like there was a strategy before to do a common, universal 26 engine. It didn’t work so well with Criterion, but it seems to have come together with Frostbite. 27 Gibeau: I was around for that. I was on the publishing side of the business when we 28 bought Criterion. The idea was that RenderWare would power all of our games in

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 21 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 25 of 60

1 the last transition. The problem was that it wasn’t ready for prime time. It hadn’t shipped any games. The tools, the pipelines, the tech just weren’t mature or 2 complete. Then I took that learning because in my role as the head of the studios, I had to make sure we understood how we were going to manage the technology. 3 We understood the architecture of these machines was very different from 4 last time. Looking at the opportunities there, we went after Frostbite and Ignite. We created two technology paths and invested early and got them to the point 5 where we were able to ship games on them. We weren’t fighting the engines as we were developing. In the last cycle, the engines weren’t done. Guys were fighting the 6 tools. They weren’t spending any time polishing the games while we were starting new [intellectual property]. So we wanted to de-risk the technology piece as much 7 as possible. 8 That was the key learning. You nailed it – we blew the last transition because we relied on RenderWare. It didn’t work. It set us back for multiple years. I was not 9 going to repeat that mistake. 10 * * *

11 Frostbite has been the core difference. . . . [I]t makes for efficient and low- risk development. 12 78. Following EA’s July 23, 2013 investor conference call and Gibeau’s false assurances 13 regarding the purported de-risking of the development process, EA’s stock price increased 6.6%, 14 from a close of $23.83 on July 23, 2013 to a close of $25.41 on July 24, 2013. 15 79. On July 28, 2013, The Examiner Newspaper published an article reviewing next- 16 generation games. The article stated that there was no reason to doubt that Battlefield 4 would be the 17 best of the lot, due to the Frostbite 3 technology engine. 18 All of the Battlefield games have been good. Great even. And from what everyone 19 has seen and read about Battlefield 4 there’s no reason to doubt it will be the best of the lot. 20 * * * 21 DICE has developed a new engine for B4, in what they say is the most 22 human, dramatic and believable game yet. It will run at a stunning 60 frames a second. 23 De-risk Had a Particular, Specific Meaning that Was Understood Within the Industry and by 24 Investors:

25 80. Defendants’ repeated and purposeful use of the word de-risk had a particular meaning 26 that was well understood and important within the game development industry and by industry 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 22 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 26 of 60

1 analysts.10 De-risking a game’s technology engine or platform refers specifically to minimizing the 2 risks associated with the technological aspect of game development that, as described by game 3 company Unity in a press release about how their success underscores its strength in de-risking the 4 business of game creation, serves as “the glue to put together all the components of your game.” See 5 also ¶36 n.4 (a technology platform is the heart and brain of a game, the motor that pushes the game 6 down the road). De-risk is frequently used by industry insiders to communicate that meaning. For 7 example:

8  Metrix Capital Group, a private equity firm, announced its investment in video game publisher Little Orbit by highlighting it’s CEO’s unprecedented “model for . . . 9 de-risking game development.”

10  The Vice President of Games at SGN (Social Gaming Network) wrote an article that focused on the important question “how can we de-risk the game development 11 process” and proclaimed that “[t]he concept of de-risking permeates everything we do as a company.” 12  The President of HeroEngine, a developer of MMO (massively multiplayer online) 13 games and the issuer of technology licensed by EA, authored an article titled “Prophet or Profit: Derisking Development in Online Games.” 14  Game company Kabam posted an article titled “De-risking video game 15 development.” 16 81. Thus, when defendants represented that, in contrast to the problems EA experienced 17 with launching games successfully during the last console transition, the Frostbite 3 technology 18 platform on which Battlefield 4 was being developed had been largely de-risked (¶66), that EA had 19 de-risked it (¶73), and that they had de-risked it as much as possible and succeeded at creating an 20 efficient and low-risk development environment (¶77), industry analysts understood those 21 representations to mean that EA had successfully minimized the risks associated with the biggest 22 technological hurdle that could impede the development of Battlefield 4, i.e., the Company had 23 created a highly functional technology engine in Frostbite 3. See, e.g., ¶79 (EA has successfully 24 developed a new technology engine for Battlefield 4); ¶87 (Frostbite 3 has successfully reduced 25 redundant coding and streamlined work for Battlefield 4’s development). 26

27 10 Cambridge Dictionaries Online defines “de-risk” as “to make something safer by reducing the 28 possibility that something bad will happen and that money will be lost.”

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 23 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 27 of 60

1 Reasons Why Defendants’ May 7, 2013, June 12, 2013 and July 23, 2013 Statements in ¶¶66, 73 and 77 Were Knowingly or Recklessly False and Misleading: 2 82. The statements in ¶¶66, 73, 77 were knowingly or recklessly false and misleading 3 when made and perpetuated the false impression that EA had successfully addressed the issues that 4 plagued the launch of games like Medal of Honor, The Simpsons and SimCity by de-risking 5 Battlefield 4’s development and technology platform. The facts alleged demonstrate conclusively 6 that neither Battlefield 4 nor its technology platform Frostbite 3 were de-risked, largely or at all, and 7 that the game’s development was high, not low, risk. For example: 8 (a) As evidenced by consumer experience with Battlefield 4 upon its launch on 9 next-generation consoles, the technical development of Battlefield 4 had not been de-risked. ¶¶94- 10 96, 99. Instead, Battlefield 4’s launch was plagued by the very defects and development shortfalls 11 that defendants claimed were cured by the de-risking that they assured investors would make 12 Battlefield 4’s launch different than Medal of Honor, The Simpsons and SimCity. For example, users 13 and news outlets discovered the following “gamebreaking” issues published immediately upon 14 Battlefield 4’s next-generation launch: 15  “I can’t play at all. Crashes as soon as I get past the main menu.” ¶94. 16  “I’ve deleted the game data and reinstalled it twice. It lets me into one game and 17 then crashes and then everything’s corrupt.” Id.

18  “Every single game mode I try playing I [] immediately get disconnected from server. Games [] completely unplayable.” Id. 19 As one publication summarized, the next-generation version of Battlefield 4 “has been plagued with 20 numerous critical issues that incite frequent crashes, the loss of campaign saved data and a complete 21 inability to connect to the 64-player Conquest servers.” ¶96. The breadth and magnitude of these 22 launch defects establish that Battlefield 4 and its technology platform were not de-risked when 23 defendants represented they were. 24 (b) In addition, Battlefield 4’s development was also high risk, not low risk as 25 defendants falsely represented. EA was developing Battlefield 4 simultaneously for five platforms 26 including two – the next-generation consoles – with technical specifications that had not been 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 24 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 28 of 60

1 finalized and using game code meant to execute across multiple processors (prior versions of 2 Battlefield had a code that executed on a single processor). ¶¶6, 111, 117. 3 (c) In addition to the facts disclosed by users and media coverage disclosing the 4 falsity of the Company’s representations, defendants tacitly admitted falsity when, just weeks after 5 Battlefield 4’s release on next-generation consoles and in response to the myriad issues identified by 6 consumers and reporters, defendants announced they would order DICE to cease work on all other 7 projects, including other highly-anticipated games, in order to fix the myriad issues with 8 Battlefield 4.

9  “[W]e’re not moving onto future projects or expansions until we sort out all the issues with Battlefield 4.” ¶103. 10 (d) Analysts and reporters understood this reaction as an admission that 11 defendants had not avoided the problems that had plagued prior failed game launches and console 12 transitions. Reactions included: 13  “I find it hard to believe the issues facing Battlefield 4 were a surprise to EA and 14 DICE.” ¶106.

15  “It will take time to fix the myriad of connectivity issues, server limitations, and other problems Battlefield 4 gamers have experienced.” ¶108. 16  “EA sold a fundamentally broken product for $60.” ¶116. 17 (e) More importantly, defendant Wilson specifically and publicly admitted that, in 18 contrast to defendants’ repeated and false assurances to investors that the technological aspect of the 19 game’s development being de-risked, in truth the Battlefield 4 technology platform and game 20 software were not even finished as of the date of the game’s release: 21  “[W]hen you are building a game on an unfinished platform with unfinished 22 software, there are some things that can’t get done until the very last minute because the platform wasn’t ready to get done.” ¶117. 23 83. On September 17, 2013, an article in Eurogamer informed consumers that the 24 Battlefield 4 beta version for PC, PlayStation 3 and Xbox 360 would be made available by EA for 25 download in early October. There was no beta version released for next-generation consoles, 26 however, because the consoles were not available to consumers. 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 25 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 29 of 60

1 Battlefield 4 Launches for Existing Consoles and Defendants Falsely Represent that Their Next- Generation Launch Software Is Well Ahead of the Transition 2 84. After market close on October 29, 2013, EA hosted its 2Q14 earnings conference call. 3 The call was held the same day that Battlefield 4 launched for the three extant platforms: PC, XBox 4 360, and PS3. The PS4 and Xbox One console launches were two and three weeks away, 5 respectively, and Battlefield 4 would be available on each the day it launched. Jorgensen, during 6 prepared remarks at the start of the call, summarized the quarter’s importance to the Company’s 7 yearly earnings by comparing the coming 3Q14 to the World Series. In Jorgensen’s anology, 8 Battlefield 4 was the ace pitcher sent to the mound to clinch victory in 3Q14. 9 Q3 represents more than 40% of our total non-GAAP revenue, and 98% of our 10 annual EPS. Similar to the World Series, where the remaining game or two will determine the season for Peter Moore’s beloved Boston Red Sox, the next few 11 months will determine the success of our fiscal year. Our team is battle-tested and ready, and today, we are sending our ace, Battlefield 4, to the mound. 12 85. False and Misleading Statement: During the question and answer session, an analyst 13 asked whether Battlefield 4 was in line with EA’s quality expectations and about the impact of the 14 next-generation cycle on EA’s direction. Wilson responded by misrepresenting that the Company’s 15 strong transition games resulted from close work with console manufacturers Microsoft and Sony. 16 [Analyst:] First off, just to the launch of Battlefield, wonder if you would comment 17 on some of the initial feedback, and if the game has ended up in line with your own quality expectations. 18 And then secondly, Andrew, I wonder if you could expand a bit on [how] you 19 see the next gen cycle impacting EA and the direction you’re taking the Company? 20 * * * 21 [Wilson:] [C]ertainly, coming out of the last transition, we were resolute in our desire to ensure we didn’t have that kind of challenge again. 22 So as we approach this transition, I would say we started work earlier than we 23 ever had done before, and we worked more closely with both Microsoft and Sony throughout the entire process, and the end result is, we have a launch slate of 24 games that are the best transition games that I’ve ever seen come out of this Company. 25 86. False and Misleading Statement: Another analyst asked whether defendants’ opinion 26 regarding the impact of next-generation consoles had changed based on the games scheduled to be 27 available when the consoles launched. Wilson’s response reached beyond the question asked to 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 26 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 30 of 60

1 falsely represent that EA’s launch software was head and shoulders above where it was during the 2 last transition and falsely tout EA’s execution on developing games for next-generation consoles. 3 [Wilson:] [W]hen you look at the success of a console generation, it’s the combination of two things. Great consoles and great software. And as I talked about 4 earlier, I think that our launch software this time is head and shoulders above where we were last time, and certainly, will I believe, satiate the appetite for gamers, 5 and actually grow the industry over time. So we are certainly bullish as we come into this platform generation, particularly as well as we have executed. 6 87. Following EA’s October 29, 2013 earnings release and investor conference call, 7 analysts and media issued positive reports on the Company in response to defendants’ false 8 representations concerning Battlefield 4. For example, on October 29, 2013, Morningstar Credit 9 Research issued a report discussing EA’s earnings release and investor call stating that EA has “shed 10 the majority of its lower-profile titles and has injected new life into its larger franchises – 11 particularly FIFA and Battlefield – by utilizing its new development engines, EA Sports Ignite and 12 Frostbite 3, which reduce redundant coding and streamline work for programmers.” Investors sent 13 EA stock soaring 7.7% by market close on October 30, 2013. 14 88. On October 30, 2013, before Battlefield 4 launched on next-generation consoles, a 15 game reviewer for Joystiq, who was provided access to Battlefield 4 on PS4 at EA’s office, 16 published a review of the game in which he described a repeatedly occurring “game-crashing” CE- 17 34878-0 Error. He noted that other reviewers provided similar access to Battlefield 4 on PS4 18 received the same error. 19 Reasons Why Defendants’ October 29, 2013 Statements in ¶¶85-86 Were Knowingly or 20 Recklessly False and Misleading: 21 89. The statements in ¶¶85-86 were knowingly or recklessly false and misleading when 22 made and perpetuated the false impression that EA’s close work with Microsoft and Sony had 23 ensured the success of Battlefield 4 and the Company’s solid execution led to launch software for 24 Battlefield 4 and other transition games was ready for launch. At the time they made the statements 25 in ¶¶85-86, defendants already knew or recklessly disregarded each of the facts detailed above in ¶82 26 and others, including that: 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 27 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 31 of 60

1 (a) At the time they spoke, defendants were aware of numerous complaints and 2 reports chronicling the extensive defects preventing gameplay on Battlefield 4 for existing platforms. 3 The reports included, for example:

4  “game crashing after about a minute or two of in game playtime???help?” ¶90(b). 5  “During the last few games it has crashed with the text box saying “Battlefield has stopped working.” Id. 6  “Getting all kinds of crashes . . .” Id. 7 (b) Battlefield 4 was built using the same technology platform and game code 8 across all platforms so the game-breaking defects were all but certain to be present in the next- 9 generation version of the game. ¶¶36 n.4, 61, 79. Thus, in contrast to defendants’ statement that 10 launch software was head and shoulders above prior transitions and that the Company had executed 11 the transition well, Battlefield 4’s software defects rendered it broken and unplayable at launch. 12 (c) Defendants tacitly admitted falsity when, one month later (and just weeks 13 after Battlefield 4 launched on next-generation consoles), the Company ordered DICE to cease all 14 future development work to fix Battlefield 4, stating that “we’re not moving onto future projects or 15 expansions until we sort out all the issues with Battlefield 4.” ¶103. 16 (d) Industry analysts and reporters understood EA’s reaction to Battlefield 4’s 17 launch defects as evidence that defendants’ execution of the game was not among the best transition 18 games in EA’s history, but rather was an admission that the game was rushed out and its defects 19 were not surprising to defendants. Among other things, they wrote: 20  “I find it hard to believe the issues facing Battlefield 4 were a surprise to EA and 21 DICE.” ¶106.

22  “The problem was so bad that in December 2013 DICE said it had placed all of its expansions and “future projects” on the backburner while it put all hands on deck 23 to focus on sorting out the mess.” ¶117.

24  “The Battlefield 4 bugs are about the biggest snafu in recent gaming history, proof that the game was rushed out and damaged [EA’s] reputation for the latest 25 generation.” ¶118. 26 (e) Moreover, defendants had failed to test Battlefield 4 sufficiently to determine, 27 let alone ensure, that it had been executed well or its launch software was head and shoulders above 28 the launch software from the last transition. A developer who worked on the game revealed that EA

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 28 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 32 of 60

1 could not “get close” to testing the game sufficiently before its launch. ¶92; see also ¶112. In fact, 2 as Wilson later admitted, Battlefield 4 was built with unfinished game software with build 3 requirements that weren’t finished in time to test adequately:

4  “What was happening with Battlefield 4 . . . [there] was a lot of it we couldn’t test until really late in the phase.” ¶117. 5 Thus, it was false and misleading to declare the Company’s next-generation launch software “head 6 and shoulders” above anything or laud the Company’s execution of next-generation games. Notably, 7 industry reporters were skeptical that defendants were unaware of the issues facing Battlefield 4. 8 ¶106. 9 (f) EA’s assurance that its close work with Microsoft and Sony had led to the best 10 transition games was shown to be false by the revelation that next-generation build requirements 11 took longer than expected to develop, which resulted in insufficient time for EA to test and debug 12 Battlefield 4. ¶117. Thus, the true reason that EA worked more closely with Microsoft and Sony 13 than ever before was that the next-generation consoles were unfinished while Battlefield 4 was being 14 developed, which necessitated close communication in the fruitless attempt to develop Battlefield 4 15 in time for a successful launch on new consoles still under development. 16 Gamers Begin to Play Battlefield 4 and Are Confronted by Debilitating Defects that Made the 17 Game Unplayable 18 90. As soon as customers world-wide began to play Battlefield 4, they encountered 19 widespread game-breaking issues. On October 29, 2013 and immediately thereafter, customers 20 flocked to forums, including but not limited to one hosted by About.com and another hosted by 21 Reddit, to identify the game-breaking bugs they discovered while attempting to play or playing 22 Battlefield 4. Generally, the bugs identified included (a) bugs that prevented any gameplay, (b) bugs 23 that caused crashes or freezes during gameplay, (c) bugs that caused server connectivity issues,

24 (d) bugs that caused broken gameplay, and (e) bugs that caused lost gameplay.11 25

11 The About.com forum, “Battlefield 4 Bugs, Problems and Known Issues,” is available at 26 http://compactiongames.about.com/b/2013/10/29/battlefield-4-bugs-problems-and-known-issues.htm (last visited Nov. 18, 2014). The Reddit forum, “Official Battlefield 4 bug/help thread,” is available 27 at http://www.reddit.com/r/battlefield_4/comments/1pe4il/official_battlefield_4_bughelp_thread/ (last visited Nov. 18, 2014). Spelling and grammar in the excerpted comments are as they appear in 28 the original. About.com does not designate the time zone for its date and time stamps. Reddit date 983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 29 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 33 of 60

1 (a) Unable to Play

2  “Preloaded just fine but won’t install. Does nothing. No errors or anything. Just won’t install.” (Oct. 29, 2013 at 12:49 a.m.) 3  “downloaded fine overnight, wont install today. No errors, nothing . . . just acts like 4 its going to load for about 3 seconds and then just stops.” (Oct. 29, 2013 at 6:40 p.m.) 5  “Game stuck on ‘initializing’ (campaign) or ‘joining server’ (multiplayer) another 6 window never opens game never loads. I have already: tried on multiple browsers, downloaded pluggins, installed latest drivers, unplugged all usb equipment, repaired 7 install, and restarted client. anyone have any idea how to make this 63$ paperweight work?” (Oct. 29, 2013 at 7:34 p.m.) 8  “do not get this game. buggy as hell. loading screen freezes and nothing happens. I 9 am on PS3 and never had this happen with a game. DO NOT BUY THIS GAME. Bugs all over the place.” (Oct. 29, 2013 at 8:31 p.m.) 10  “Soo i just went [through] 2 used xboxs with 2 new BF4 games and received an error 11 message saying it cant read disc each time. soo i went out and bought a new xbox and new copy of BF4 but still am getting the same error message. WTF is all i can 12 think lol. ANY HELP??” (Oct. 30, 2013 at 12:32 a.m.)

13  “I can’t even join a match, right before being loaded to the deployment screen, I am always met with a “Battlefield 4 has stopped working . . .” (Oct. 30, 2013 at 3:29 14 p.m.)

15  “Game wont even start.” (Oct. 30, 2013 at 11:35 p.m.) 16 (b) Crashing/Freezing During Gameplay

17  “Game crashes in middle of [multi-player] matches” (Oct. 28, 2013 at 8:04 a.m.) 18  “game crashing after about a minute or two of in game playtime??? help?” (Oct. 28, 2013 at 4:05 p.m.) 19  “During the last few games it has crashed with the text box saying “Battlefield has 20 stopped working.” (Oct. 28, 2013 at 7:39 p.m.)

21 o [In response:] “Same here. . . . Kinda wish I could play the game I paid for.” (Oct. 29, 2013 at 6:55 a.m.) 22  “My game always freezes/crashes whenever I use the repair tool for more than 15 23 seconds.” (Oct. 28, 2013 at 9:03 p.m.) 24  “My game randomly freezes completely, and is just stuck repeating the same sound over and over. . . . I[t] happens completely random, sometimes 2 minutes after game 25 start, and sometimes after 20-30 minutes.” (Oct. 28, 2013 at 8:22 p.m.)

26 27 and time stamps are UTC. Reddit is an entertainment, social networking and news website where registered users can create forums and submit content. The Pew Research Internet Project reported 28 in 2013 that 6% of all adult internet users use Reddit.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 30 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 34 of 60

1  “Been getting ‘Battlefield 4 has stopped working’ a lot. . . . just been freezing and crashing :( (Oct. 28, 2013 at 8:24 p.m.) 2  “~10 minutes into Siege of Shanghai game, crashed. Frozen game covered the error 3 message, but it appears to be a “device has hung” directx error.” (Oct. 29, 2013 at 4:40 a.m.) 4  “Massive rubberbanding and crashing. Every server I have been on gets too 5 rubberbandy to play within about an hour of being restarted. And every server I have played crashes (for everyone on it) about every other map. I maintain 80+ FPS, but 6 the rubberbanding/hitching that happens every 1.5 to 3 seconds non-stop is unbearable.” (Oct. 29, 2013 at 8:04 a.m.) 7  “Getting all kinds of crashes, from kernelbase.dll crashes, to bf4.exe crashes.” (Oct. 8 29, 2013 at 8:23 a.m.)

9  “Crashing to desktop after about 10 minutes of play. Glitches and rubber banding everywhere.” (Oct. 29, 2013 at 12:31 p.m.) 10  “The random freezing/crashing is making it unplayable.” (Oct. 30, 2013 at 12:46 11 a.m.)

12  “Sniper rifles shoot through guys and nothing happens (Campaign), the game constantly freezes. . . . I am seconds away from taking this pile of steaming crap 13 back!!!” (Oct. 30, 2013 at 2:53 p.m.)

14  “Has the game been crashing for anyone? I’ll be playing just fine without any problems and then out of the blue within about 5 minutes my game freezes and then 15 crashes, please HELP!” (Oct. 31, 2013 at 12:43 a.m.)

16  “My computer will completely lock up (can’t run any programs, can’t ctrl+alt+del to open task manager, can’t right click taskbar to open task manager – nothing. I 17 HAVE to use the power button to turn my computer off. Everything is unresponsive.” (Oct. 31, 2013 at 5:06 a.m.) 18 o [In response:] “Same s*** here.” (Oct. 31, 2013 at 7:38 a.m.) 19  “My game freezes and i can’t even use ctrl+alt+del, i have to hard reset my 20 computer. . . . It’s completely unplayable, it’s worst than the Beta. . . .” (Nov. 1, 2013 at 1:22 p.m.) 21  “I can’t stay connected to a game for longer than 5 minutes. “Battlefield 4 has 22 stopped working” keeps appearing.” (Nov. 2, 2013 at 4:20 a.m.)

23  Massive rubber banding issues, random crash to desktop with looping sounds, unstable servers.” (Nov. 2, 2013 at 2:52 p.m.) 24 25 26 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 31 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 35 of 60

1 (c) Connectivity Issues

2  “Can’t play online with friends on Xbox Live. Getting this error msg when trying to join their server ‘the joined game is running an incompatible version.’” (Oct. 29, 3 2013 at 12:14 p.m.)

4  “Sorry, an error has occurred: Unable to connect to EA servers to activate BF4. Yet another EA game I cant play because of connection/server issues. I think I am done 5 with EA games.” (Oct. 29, 2013 at 6:13 p.m.)

6  “Me and my friend can’t get past the “Connecting” stage when trying to join a server. It gets past the “Logging In” and “Joining Server” but won’t get to the “Loading 7 Game” screen.” (Oct. 29, 2013 at 9:53 p.m.)

8  “every time I try to join a server it gives me this error: ERROR Your game session has expired, please log out and then log in again” (Oct. 30, 2013 at 5:07 a.m.) 9  “Server crashing and game crashing. Very frustrating when you’ve been on a server 10 for 45 minutes, it crashes and then you find out that all the points you just got have been erased.” (Oct. 30, 2013 at 9:56 p.m.) 11 (d) Broken Gameplay 12  “The game never loads the map, it brings up the screen as if i was loading into the 13 game, but it sits there forever.” (Oct. 29, 2013 at 4:44 p.m.)

14  “during the campaign it constantly jumps and loads like it were to have scratches and when i was on the deck of the sinking air craft carrier it was treating me like i was 15 inside a wall???? i couldnt see anything.” (Oct. 30, 2013 at 6:32 a.m.)

16  “Can’t move in the game. I just run in place.” (Oct. 30, 2013 at 9:30 p.m.) 17  “players become invisible with no ability to retrieve weapons and having to restart game as it freezes.” (Oct. 31, 2013 at 12:57 a.m.) 18  “My game keeps stuttering. I notice good framerate (45-60) but suddenly the game 19 stutters. It drives me nuts. This coupled with the server ruberbanding, then the no sound, plus the crashes every other map, all makes for the worst launch I’ve ever 20 been in.” (Oct. 31, 2013 at 6:17 a.m.) 21 (e) Lost Gameplay

22  “After closing the single player, it appears none of my progress has saved.” (Oct. 28, 2013 at 5:51 p.m.) 23  “Woo, save file corrupted, nothing I could do, just lost 4 hours campaign progress. 24 Hope save files can be transferred because that’s a pain in the ass.” (Oct. 28, 2013 at 8:01 p.m.) 25  “Constant crashing every few games or rounds. Really irritating when i get in the 26 groove and lose everything.” (Oct. 30, 2013 at 1:41 a.m.)

27  “If you die, the game freezes entirely. Any attempts to reload also freeze, thus hinting at a corrupt save. I’ve had to replay the mission twice now and both times 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 32 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 36 of 60

1 my save has been corrupted. The only solution being to restart the mission.” (Oct. 30, 2013 at 3:12 p.m.) 2  “After coming back the next day my entire campaign progress has been deleted. I 3 am so frustrated that I might trade it in. Spending $60 on a piece of plastic is already frustrating in itself. Fix the damn game before it comes out you impatient greedy 4 mfers.” (Nov. 1, 2013 at 6:00 p.m.) 5 91. One gamer summarized by warning potential customers not to buy Battlefield 4: “DO 6 NOT GET THIS GAME TOO MUCH STUFF WRONG WITH IT I CANT JOIN A GAME.” 7 Another potential customer commented “afraid to buy BF4 after viewing this thread,” to which 8 someone who had already purchased the game responded by telling the potential customer not to 9 buy: “All games have bugs, but not all games are broken upon release.” 10 92. In an e-mail conversation that occurred on or before November 6, 2013 about 11 Battlefield 4’s launch problems, a DICE developer who worked on the game revealed that EA was in 12 fact incapable of testing the product in a way that could simulate real world usage “on so many 13 different set-ups we couldn’t get close to!” and pushed for the game to be released two weeks before 14 Call of Duty: 15 [Question:] Hey man, . . . Now, I got a few confidential questions. I will not [spill] the beans on names or this conversation even taking place. I just want to ask: How 16 did bugs like the no sound at all, no third person on jets with Hydra’s and the constant server crashing pass QA? . . . 17 * * * 18 [Answer:] First we have a company culture that always wants more and more in the 19 game until the very end of the project which puts an enormous strain on QA to test everything. 20 Then you have EA that wants us to release 2 weeks before [Call of Duty] to 21 avoid competition. 22 * * * 23 Also when it comes to testing there are just so many test cases and some are really hard to solve while others are not thought of completely. 24 Imagine we are 300 people at DICE, imagine we test the game 1000 hours 25 per person. That’s 300,000hrs of testing. 26 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 33 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 37 of 60

1 Then imagine we release the game and 5million people buy it and play for one hour. That’s 5million hours tested in the first hour the game is released and on 2 so many different set-ups we couldn’t get close to!12 3 Defects with Battlefield 4 for Next-Generation Consoles Begin to Become Known and Defendants Concede Some Problems, but the Stock Price Remains Artificially Inflated 4 93. On November 15, 2013, PS4 went on sale and with it EA launched the next- 5 generation version of Battlefield 4 for PS4. EA’s stock price began an immediate decline on 6 suggestions that sales of Battlefield 4 for next-generation consoles were softer than expected and 7 reports that the game had numerous defects. That day, EA posted a message blaming PS4 for 8 “crashing/freezing and non-responsive connections between the player’s console and their TV 9 screen.” EA quickly removed the message and represented that it had been posted in error. The 10 stock price closed at $24.06 on November 15, 2013, down 7% from the day before, on high volume 11 of more than 11.1 million shares. 12 94. On and immediately after November 15, 2013, on Reddit’s PS4 page, users created 13 numerous forums regarding Battlefield 4’s launch on PS4 whose very titles revealed game-crashing 14 defects, including “Battlefield 4 – Unplayable on PS4 (CE-34878-0)”;13 “Has anyone had battlefield 15 corrupt your game save and constantly crash”; “Battlefield 4 [Single Player] crashed and my data 16 was corrupted”; “Is Battlefield 4 still messed up?”; “Battlefield 4 Crashing Constantly”; “Anyone 17 else having issues with battlefield 4 crashing and corrupting data?”; and “Battlefield 4 still not 18 working?” A selection of conversation threads included the following:14 19  “Every single game mode I try playing I [] immediately get disconnected from 20 server. Games [] completly unplayable.” (Nov. 20, 2013 at 3:26 p.m.)

21  “I don’t crash I keep getting connection to ea servers lost.” (Nov. 20, 2013 at 3:47 p.m.) 22 23

24 12 Conversation posted at http://bf4central.com/2013/11/ea-pushed-battlefield-4-quality-control 25 (last visited Nov. 18, 2014). Spelling and grammar are as they appear in the original. 13 This was the same error noted prior to launch by a reviewer who was provided early access to 26 Battlefield 4 on PS4. ¶88.

27 14 Available at www.reddit.com/r/PS4/comments/1r2993/battlefield_4_still_not_working (last 28 visited Nov. 18, 2014). Spelling and grammar are as they appear in the original.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 34 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 38 of 60

1  “I’ve played Obliteration mostly and have had intermittent issues: save file corrupted, no Conquest obviously, crash from main menu multiple times in a row 2 before I can get into the multiplayer menu.” (Nov. 20, 2013 at 4:18 p.m.)

3  “I was booted like 5 times last night. That was the worst it has been since launch.” (Nov. 20, 2013 at 4:54 p.m.) 4  “I can’t play at all. Crashes as soon as I get past the main menu” (Nov. 20, 2013 at 5 5:10 p.m.)

6  “Mine was working decently there for a while, but the last 2 days or so I have one of two things happen. I either get into a game and play for around 30 minutes or so 7 then get booted from the server randomly back to the blue PS error screen (which is the most frustrating losing 30 minutes worth of exp, etc.) or when I join a game it 8 goes through the load screen and then tells me I got disconnected. I’d rather not get into a game than waste 30+ minutes only to lose it all multiple times in a night.” 9 (Nov. 20, 2013 at 5:12 p.m.)

10  “Lots of crashes when trying to load the game. You can get dropped randomly from some of the medium-sized modes.” (Nov. 20, 2013 at 6:26 p.m.) 11  “I’ve deleted the game data and reinstalled it twice. It lets me into one game and then 12 crashes and then everything’s corrupt.” (Nov. 20, 2013 at 7:52 p.m.)

13  “now i cant even get past the first screen. when it says press option to continue i do that and the game freezes there.” (Nov. 20, 2013 at 8:29 p.m.) 14  “I can’t get to the campaign/mp menu. Tried every possible fix.” (Nov. 20, 2013 at 15 8:47 p.m.)

16  “I cant even connect to the EA server :(“ (Nov. 26, 2013 at 12:59 a.m.) 17  “I can’t play the single player because the next day, when I go into the game it resets as if I never played it. I even tried it again with the latest patch and nope. Damn 18 thing deleted my save game. I’m done trying. The [single player] for Battlefield always blew anyway.” (Dec. 1, 2013 at 5:10 a.m.) 19 95. On November 18, 2013, International Business Times reported that the PS4 version 20 of Battlefield 4 “has been experiencing a serious issue wherein players are greeted with a ‘CE- 21 34878-0 Error.’”15 22 96. On November 22, 2013, industry website CVG reported that “Since release on 23 November 15, the PS4 version of BF4 has been plagued with numerous critical issues that incite 24 frequent crashes, the loss of campaign saved data and a complete inability to connect to the 64- 25 player Conquest servers.” 26

27 15 This was the same error noted prior to launch by a reviewer who was provided early access to 28 Battlefield 4 on PS4. ¶88.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 35 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 39 of 60

1 97. Xbox One went on sale on November 22, 2013, and so did Battlefield 4 for Xbox 2 One. It quickly became clear that bugs plagued the Battlefield 4 release for Xbox One, too. 3 98. After market close on November 22, 2013, Wilson released a statement on his official 4 EA blog with the headline, “The Wild First Week of the Next Generation.” In it, Wilson 5 acknowledged stability issues and problems when playing Battlefield 4 on next-generation consoles: 6 We have had our challenges with stability issues on Battlefield 4, and the DICE team is 100 percent focused on understanding and resolving the problems that some 7 players have been having. We won’t rest until we get things fixed . . . . 8 99. On November 29, 2013, Destructoid published a review of Battlefield 4 for next- 9 generation consoles. The reviewer wrote: 10 The “next-gen” consoles . . . have some nasty stability issues despite the fact that the experience is upgraded in almost every way possible. 11 When it works, that is. 12 100. These disclosures caused EA’s stock price to fall from $25.96 on November 14, 2013, 13 to $21.54 on December 3, 2013, as some of the artificial inflation due to defendants’ earlier false and 14 misleading statements was removed. 15 101. After market close on December 3, 2013, Wilson and Jorgensen presented at the 16 Credit Suisse Technology Conference. In response to an analyst’s question about how game 17 development teams could take advantage of the opportunities presented by the recently-released 18 consoles, Wilson represented that EA’s teams were already starting to think about future investments 19 and innovation: 20 [Wilson:] I think that we have reached a level of quality at launch that we didn’t get 21 to last time, and our teams are already starting to think about investment in new innovation for the future. 22 102. Investors reacted by pushing EA stock back up 3.7% by market close on December 4, 23 2013, helping it to recover some of the artificial inflation that had been removed starting on 24 November 15, 2013. 25 Defendants Largely Concede the True Extent of Battlefield 4’s Defects and Stop Production on 26 All New Products Until the Game Is Fixed; Artificial Inflation Is Removed from Stock Price

27 103. After market close on December 4, 2013, defendants acknowledged the severity of 28 Battlefield 4’s defects for the first time and stated that “our #1 priority” is fixing the game. As a

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 36 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 40 of 60

1 result, EA announced that DICE would cease development of any future projects or Battlefield 4 2 expansions until it had fixed all of the issues with Battlefield 4. 3 First, we want to thank the fans out there that are playing and supporting us with Battlefield 4. We know we still have a ways to go with fixing the game – it is 4 absolutely our #1 priority. The team at DICE is working non-stop to update the game. Since Battlefield 4 China Rising expansion pack was already in the final 5 stages of development by the time issues began with Battlefield 4, we decided to fulfill our promise to deliver it this week, but we’re not moving onto future projects 6 or expansions until we sort out all the issues with Battlefield 4. We know many of our players are frustrated, and we feel your pain. We will not stop until this is right. 7 104. IGN Entertainment ran an article about the announcement later the same day. It 8 quoted a representative for EA who stated that DICE is “‘not moving onto future projects or 9 expansions until we sort out all the issues with Battlefield 4.’” When asked about “how this affects 10 the future of other DICE games, such as Star Wars Battlefront and Mirror’s Edge,” the EA 11 representative responded, “‘We haven’t announced a ship date for Battlefront but right now the team 12 is focused on fixing Battlefield 4.’” 13 105. On December 4, 2013, Forbes published an article titled, “EA Halts DICE Projects 14 Pending ‘Battlefield 4’ Fixes,” which disclosed the game’s defects and usability issues experienced 15 by Battlefield 4 users and that the Company had halted all work on other projects. The article 16 speculated that EA had rushed the game to market so as to avoid handing victory to Call of Duty. 17 After weeks of connectivity issues, server limitations, and various other 18 problems plaguing EA’s cross-gen shooter Battlefield 4, the publisher has decided to halt all future projects from developer DICE until fixes can be worked out. 19 * * * 20 EA did not lay out a time-table for the fixes, however, but this does mean that 21 future BF4 [downloadable content] and Star Wars Battlefront 3 are on hold. 22 * * * 23 I suspect that EA didn’t want to hand victory over to Activision and Call of Duty: Ghosts by delaying the game, possibly even beyond the holiday shopping 24 season. 25 106. On December 4, 2013, Game Informer published a report titled “EA Halts DICE’s 26 Future Projects Pending Battlefield 4 Repair.” The reporter indicated his belief that EA and DICE 27 were aware of the problems earlier but chose to launch the game despite its serious defects. 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 37 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 41 of 60

1 I find it hard to believe the issues facing Battlefield 4 were a surprise to EA and DICE. While I’m hopeful that Battlefield 4 will eventually be the $60 promise 2 EA sold, right now it isn’t. 3 107. In reaction to the revelations, investors sent the price of EA stock down from $22.34 4 on December 4, 2013, to $21.01 at market close on December 5, 2013, on unusually high trading 5 volume of 12.8 million shares (more than 2.5 times the average daily volume for the preceding five 6 trading days). 7 108. On December 5, 2013, Forbes published an article titled, “Electronic Arts Tanks 8 After Hitting Reset on Battlefield 4” covering investors’ “understandable” reaction to the news.

9 The reaction from Wall Street was understandable, given not only extensive problems with one of EA’s signature games, but also the ripple effect it could have 10 through their lineup. DICE, a Swedish subsidiary, is responsible for development of other big titles like Star Wars Battlefront and Mirror’s Edge – both of which are 11 now put on indefinite hold. 12 * * * 13 It will take time to fix the myriad of connectivity issues, server limitations, and other problems Battlefield 4 gamers have experienced. During that time DICE 14 will not be working on any additional expansion packs, other downloadable content for the game (a significant revenue source), or the next versions of their 15 other hit games. No launch date had previously been announced for either the next Star Wars Battlefront or Mirror’s Edge titles. 16 Post-Class Period Revelations Underscore and Confirm the Inference of Knowing Falsity 17 109. Additional revelations about the extent to which Battlefield 4 was “broken” continued 18 to follow. On December 10, 2013, DICE publicly released the “Battlefield 4 Top Issues Tracker.” 19 Its purpose was to provide “the latest updates in regards to some of the top issues we are going to fix 20 and fan feedback we’re implementing in the game.” DICE revealed that this public tracker was 21 similar to trackers that it “always work[s] with” internally, which enable timely bug tracking and 22 fixes. The tracker had never been made public before. 23 110. Among the top issues listed on the December 10, 2013 Top Issues Tracker were: 24 “Game freezes, resulting in a sound loop”; “One-hit kill bug where players sometimes take damage 25 twice from the same bullet”; “Bug accounting for a quarter of the crashes on PS4”; “Bug accounting 26 for a majority of crashes on next-gen/PC”; “Loss of [single player] progress that can happen after 27 quit and restart on PS4”; “Players sometimes get stuck in kill cam after revive”; “Players sometimes 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 38 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 42 of 60

1 get stuck in revive screen”; “Server browser filters are not fully functioning”; “Players sometimes 2 become spectators while still alive in Defuse mode”; “The ‘Sound Loop Crash’”; “Desynchronized 3 game world where objects have different states for different players”; “Bug accounting for a large 4 amount of crashes on X360”; “Hit markers and crosshairs sometimes disappear”; and “Rubber 5 banding issues for some players with solid Internet connections.” 6 111. On December 20, 2013, PCGMedia published an article titled “DICE employee 7 explains why Battlefield 4 is ‘buggy,’” which translated an interview that the titular DICE employee, 8 a developer who worked on Battlefield 4, gave to Swedish gaming site www.fz.se. The developer 9 explained that Frostbite 3 – the very technology defendants represented “de-risked” the technology 10 side of game development for next-generation games – had been used in Battlefield 4 to create risky 11 game code. The DICE developer explained that in contrast to earlier EA games, Battlefield 4’s code 12 was, for the first time, designed to use the Frostbite technology engine to run game code on multiple 13 processors in order to take advantage of the new hardware possibilities offered by more powerful 14 PCs and next-generation consoles. Using Frostbite 3 to run code across multiple processors created 15 risks that did not exist in prior games where code ran through a single processor. According to the 16 developer, “‘When a code that’s not ‘thread-safe’ executes on multiple sources, it’s a coincidence if 17 it works or if it crashes. All the codes become ‘timing dependent’ and different hardware combined 18 with different background processes and OS’s have different timing.’” 19 112. Moreover, the DICE developer said that these risks were further magnified because 20 Battlefield 4 is a timing-dependent game. The author explained further: “Unfortunately, if you have a 21 certain CPU and you run a certain OS and at the same time you run a certain background process, 22 you could get ‘bad timing’ more often than other people, [t]iming that will cause the game to crash 23 or other bugs.” Despite these risks, the DICE developer revealed that “‘At work, we all have pretty 24 similar machines and it’s pretty hard to cover all the different versions of timing.’” In response to 25 the DICE developer’s explanation, a reader commented, “In other words, the beta test should’ve 26 been tried on a broader spectrum of machines before release. As in: ‘We needed more time.’” 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 39 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 43 of 60

1 113. On January 14, 2014, DICE posted on the official Battlefield 4 blog that it would be 2 stress testing the PS4 servers in order to make potential performance improvements. A customer 3 asked, “[S]houldn’t this kind of stuff have been done BEFORE the game released?” 4 114. On March 3, 2014, a report on iDigitalTimes noted that DICE was finally returning to 5 the development of Star Wars: Battlefront after all future projects had been put on hold for the prior 6 four months to fix Battlefield 4. 7 The last few months there hasn’t been much to report on [Star Wars] since DICE had all-dev[eloper]s-on-deck to deal with Battlefield 4’s many technical issues. . . . This 8 was bad news for Star Wars: Battlefront fans because it meant that DICE Stockholm, the studio tasked with rebooting the beloved franchise, had to divert 9 resources from Battlefront to fix Battlefield 4. 10 115. On March 7, 2014, game reviewer Scott Tucker published an article titled “127 days 11 later, and Battlefield 4 is still amazingly broken.” Among other observations, Tucker wrote: 12 To call it a rough launch would be an understatement; on PC, crashes to desktop were a disappointingly frequent occurrence, and the Playstation 4 version 13 was rendered nearly unplayable thanks to “blue screen” crashes. . . . 14 * * *

15 If DICE had a QA team working on Battlefield 4, it wasn’t obvious. . . . 16 * * *

17 EA and DICE haven’t simply released a broken game. They have cracked the foundation of the brand and driven a wedge between themselves and a loyal 18 fan base. 19 116. On April 25, 2014, Forbes published an article titled “EA Is Still Having to Fix 20 Battlefield 4.” The article called the game’s launch downright embarrassing, chronicled its launch 21 issues, and described it as fundamentally broken: 22 Battlefield 4, EA and Dice’s latest entry into their flagship shooter series, hit the market on October 29, 2013. That is, for the record, nearly half a year ago. Here 23 we are on April 25, 2014, and Dice is still doing its best to fix massive bugs. One supposes we should be glad that they’re still committed to fixing it. The fact that 24 they are, though, is downright embarrassing. 25 * * *

26 Battlefield 4 was barely operational for months after its original launch, only limping towards baseline functionality weeks after it first hit the market. The 27 resulting fallout tanked EA’s stock price and did further damage to the publishing giant’s already checkered reputation. 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 40 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 44 of 60

1 * * *

2 Making comparisons across industries is a tricky game, but the fact remains that EA sold a fundamentally broken product for $60 and still haven’t quite been able to 3 make it work. It’s like selling a chair with one leg and sending each customer one extra leg to make up for it. 4 117. On June 20, 2014, Eurogamer published an article titled “EA addresses 5 ‘unacceptable’ Battlefield 4 launch,” which was based on interviews with Wilson and DICE general 6 manager Karl-Magnus Troedsson. Wilson blamed the unacceptable launch on the fact that the game 7 was developed on an unfinished technology platform with unfinished game software, leading to 8 insufficient time to finish and test the game. He also discussed lessons learned and solutions that 9 echoed almost exactly earlier Company pronouncements in response to prior launch failures. 10 [T]he development teams behind the Battlefield series had learned their lesson the 11 tough way after Battlefield 4 launched in a state many players labeled broken. 12 * * *

13 The problem was so bad that in December 2013 DICE said it had placed all of its expansions and “future projects” on the backburner while it put all hands on 14 deck to focus on sorting out the mess. 15 “For clarity it wasn’t actually a server problem for Battlefield 4,” EA boss Andrew Wilson told Eurogamer. “It was a client side problem.” . . .16 16 * * * 17 Wilson said EA is now trying to get the “final” version of the game in the 18 bag earlier, providing the developers with more time to test. 19 “You can lengthen development cycles,” he said. “You can give a much longer timeframe between final and launch to get a lot more testing on the game. 20 You can change the development process whereby you have more stable build requirements throughout the entire set of development. You can start betas earlier so 21 you get it out in the wild earlier with more people banging away at it.” 22 * * * 23 [Wilson:] “Not to abdicate responsibility whatsoever – we own it, we are responsible for it and we have worked tirelessly to remedy the situation – but when you are 24 building a game on an unfinished platform with unfinished software, there are some things that can’t get done until the very last minute because the platform 25 wasn’t ready to get done.”

26 16 The reference to “client side” issues meant that the game installed on the user’s machine was 27 the “broken” element (as opposed to “server side” issues, which would concern EA’s remotely located game servers). As one commenter clarified: “The issue was in the game client, the software 28 you ran to play the game. Nothing to do with player machines or their connections.”

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 41 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 45 of 60

1 “What was happening with Battlefield 4, even as we were pushing all of this innovation, was a lot of it we couldn’t test until really late in the phase. I believe it 2 was unique.” 17 3 118. On July 10, 2014, industry publication Inquisitr published an article titled 4 “‘Battlefield 4’ Bugs: EA and DICE Still Fixing Their Mistakes, Owning Up.” Among other things, 5 the article provided:

6 The Battlefield 4 bugs are about the biggest snafu in recent gaming history, proof that the game was rushed out and damaged [EA’s] reputation for the latest 7 generation. . . . 8 * * * 9 [T]he Call of Duty vs Battlefield war was surprisingly one-sided as CoD: Ghosts took the trophy for simply being less of a mess. There were so many things wrong 10 with EA’s release that they practically handed the trophy to the competition.

11 DEFENDANTS’ SUSPICIOUSLY-TIMED INSIDER STOCK SALES 12 119. The individual defendants were highly motivated to keep EA’s stock price inflated 13 throughout the Class Period. According to SEC Forms 4 filed by EA, four of the individual 14 defendants made EA stock sales that were suspicious in both timing and amount. During the Class 15 Period, Wilson, Moore and Gibeau together sold a total of 701,959 shares of EA stock, reaping 16 proceeds of $17,059,848 in sales patterns that deviated strongly from their prior trading practices. 17 None of Wilson’s, Moore’s or Gibeau’s Class Period insider sales appear to have been made 18 pursuant to 10b5-1 trading plans. 19 120. The following chart lists, according to their Forms 4, Wilson’s, Moore’s and Gibeau’s 20 Class Period stock sales by date, shares sold, price and the proceeds, as well as the percentage of 21 each individual’s total stock and vested options sold during the Class Period.18 22 23 24

17 One commenter noted that “EA ha[s] basically admitted that they release broken products to 25 reach deadlines.”

26 18 The percentage of each individual’s total stock and vested options sold during the Class 27 Period is calculated based on information in the Company’s Proxies and Forms 4. The percentages do not account for any additional options that vested during the Class Period. 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 42 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 46 of 60

1 WILSON DATE SHARES PRICE PROCEEDS % SOLD 5/9/13 32,085 $21.42 $687,261 2 7/25/13 20,000 $24.64 $492,800 7/26/13 40,000 $25.50 $1,020,000 3 7/30/13 15,000 $26.27 $394,050 CLASS PERIOD 107,085 $2,594,111 85% 4 MOORE DATE SHARES PRICE PROCEEDS % SOLD 5/28/13 125,000 $23.14 $2,892,500 5 10/31/13 50,000 $26.49 $1,324,500 CLASS PERIOD 175,000 $4,217,000 25% 6 GIBEAU DATE SHARES PRICE PROCEEDS % SOLD 5/24/13 200,000 $22.77 $4,554,000 7 10/31/13 219,874 $25.90 $5,694,737 CLASS PERIOD 419,874 $10,248,737 48% 8 CLASS PERIOD (TOTAL) 701,959 17,059,848 9 121. The Class Period stock sales deviated strongly from prior trading practices. The table 10 below details Wilson’s, Moore’s and Gibeau’s insider trades from January 1, 2008 through the start 11 of the Class Period according to their Forms 4. 12 WILSON DATE SHARES PRICE PROCEEDS 13 8/31/12 38,000 $13.35 $507,300 1/1/08-5/7/13 38,000 $507,300 14 MOORE DATE SHARES PRICE PROCEEDS 9/21/09 2,500 $18.38 $45,955 15 9/17/10 2,800 $16.50 $46,200 2/3/11 15,000 $17.61 $264,152 16 5/13/11 10,000 $22.92 $229,200 2/3/12 20,000 $19.38 $387,600 17 5/21/12 7,150 $14.27 $102,031 2/21/13 5,000 $17.65 $88,250 18 1/1/08-5/7/13 62,450 $1,163,387 GIBEAU DATE SHARES PRICE PROCEEDS 19 5/28/09 24,236 $22.21 $538,282 2/8/11 51,005 $18.29 $933,040 20 1/1/08-5/7/13 75,241 $1,471,321 21 122. Thus, according to their Forms 4: 22  Wilson’s Class Period sales represented 74% of all shares of EA stock he 23 sold from January 1, 2008 through December 5, 2013; 24  Moore’s Class Period sales represented 74% of all shares of EA stock he sold from January 1, 2008 through December 5, 2013; and 25  Gibeau’s Class Period sales represented 85% of all shares of EA stock he 26 sold from January 1, 2008 through December 5, 2013. 27 123. Other EA insiders made Class Period sales of EA stock that generated an additional 28 $7,750,497 in proceeds.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 43 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 47 of 60

1  Executive Vice President of EA Studios Patrick Söderlund sold 75,000 shares of EA stock on May 29, 2013 at $23.14 per share and 40,000 shares of EA stock on August 2 12, 2013 at $26.80 per share. In total, Söderlund’s Class Period sales generated $2,807,500 in proceeds. 3  Chief Technology Officer Rajat Taneja sold 39,573 shares of EA stock on May 28, 4 2013 at $23.30 per share and 15,000 shares of EA stock on August 19, 2013 at $26.98 per share. In total, Taneja’s Class Period sales generated $1,326,751 in 5 proceeds.

6  General Counsel Stephen G. Bene sold 25,000 shares of EA stock on May 10, 2013 at $22.40 per share; 7,802 shares of EA stock on May 17, 2013 at $21.58 per share; 7 8,323 shares of EA stock on May 20, 2013 at $22.03 per share; and 6,761 shares of EA stock on May 21, 2013. In total, Bene’s Class Period sales generated $1,058,910 8 in proceeds.

9  Officer Gabrielle B. Toledano sold 9,141 shares of EA stock on May 15, 2013 at $22.65; 10,000 shares of EA stock on May 15, 2013 at $22.70; 10,859 shares of EA 10 stock on May 24, 2013 at $22.70; 20,000 shares of EA stock on July 30, 2013 at $25.99; 10,000 shares of EA stock on $27.00; 25,000 shares of EA stock on 11 November 4, 2013 at $25.50; and 30,000 shares of EA stock on November 12, 2013 at $26.49. In total, Toledano’s Class Period sales generated $2,902,543 in proceeds. 12  Officer Joel Linzner sold 10,000 shares of EA stock on May 14, 2013 at $22.12 per 13 share; 15,000 shares of EA stock on May 24, 2013 at $22.80 per share; 15,000 shares of EA stock on May 30, 2013 at $23.25 per share; 30,000 shares of EA stock at 14 $26.15 per share; and 4,409 shares of EA stock on August 21, 2013 at $26.47 per share. In total, Linzner’s Class Period sales generated $1,813,156 in proceeds. 15  Officer Kenneth A. Barker sold 27,848 shares of EA stock on May 30, 2013 at 16 $23.31 per share. In total, Barker’s Class Period sales generated $649,137 in proceeds. 17 THE PSLRA SAFE HARBOR DOES NOT APPLY 18 124. The PSLRA “Safe Harbor” warnings that accompanied defendants’ forward-looking 19 statements issued during the Class Period were ineffective to shield defendants from liability for 20 their false and misleading statements and omissions of material fact. 21 125. To the extent that the false and misleading statements related to existing facts or 22 conditions, the Safe Harbor does not apply. To the extent that the false and misleading statements 23 are forward looking, defendants are still liable. Defendants knew at the time they spoke or failed to 24 speak fully that each of their forward-looking false and misleading statements were false and 25 misleading. Defendants’ false and misleading forward-looking statements were authorized or 26 approved by an executive officer or director of EA, who knew that the forward-looking statements 27 were false. The forward-looking statements were contradicted by existing, undisclosed material 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 44 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 48 of 60

1 facts that were required to be disclosed so that the forward-looking statement would not be 2 misleading. And the “Safe Harbor” warnings were themselves misleading because they warned of 3 “risks” that had already materialized or failed to provide meaningful disclosures of the relevant risks.

4 CONTROL PERSON ALLEGATIONS 5 126. As alleged herein, the individual defendants and Jorgensen acted as control persons of 6 EA within the meaning of §20(a) of the 1934 Act. By virtue of their high-level positions, 7 participation in and awareness of the Company’s operations and intimate knowledge of the false 8 statements and omissions made by EA and disseminated to the investing public, the individual 9 defendants and Jorgensen had the power to influence and control, and did influence and control, 10 directly or indirectly, the Company’s decision-making, including the content and dissemination of 11 the various statements that plaintiffs contend are false and misleading. 12 127. The individual defendants and Jorgensen participated in conference calls with 13 investors and analysts and interviews with media, and were provided with or had unlimited access to 14 copies of the Company’s reports, press releases, public filings and other statements alleged by 15 plaintiffs to be misleading, prior to and/or shortly after the statements were issued, and had the 16 ability to prevent the issuance of statements or cause the statements to be corrected. 17 128. Each of the individual defendants and Jorgensen had direct and supervisory 18 involvement in the day-to-day operations of the Company and had and exercised the power to 19 control or influence the product development giving rise to the securities violations alleged herein. 20 Furthermore, throughout the Class Period, the defendants and Jorgensen had consistent and constant 21 access to information about the development and testing of Battlefield 4. 22 129. As set forth above, defendants violated §10(b) of the 1934 Act and Rule 10b-5 by 23 their acts and omissions. By virtue of their positions as controlling persons, the individual 24 defendants and Jorgensen are liable under §20(a) of the 1934 Act. As a direct and proximate result 25 of the individual defendants’ wrongful conduct, plaintiffs and other members of the Class suffered 26 damages in connection with their purchases of the Company’s publicly-traded securities during the 27 Class Period. 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 45 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 49 of 60

1 LOSS CAUSATION/ECONOMIC LOSS 2 130. As set forth above, defendants’ deceptive conduct, misrepresentations, and omissions 3 of material fact were a significant cause of the artificial inflation of EA’s stock price throughout the 4 Class Period. On May 7, 2013, the day before the Class Period, EA’s stock price closed at $18.41 5 per share. After the market closed, EA announced its 4Q13 and FY13 results and hosted an earnings 6 conference call at which defendants made misrepresentations regarding the de-risked platform for 7 developing Battlefield 4. After these misrepresentations EA’s stock price increased 17%, from 8 $18.41 at close on May 7, 2013 to $21.56 at close on May 8, 2013, on heavy volume of more than 22 9 million shares.19 10 131. On July 23, 2013, defendants presented EA’s 1Q14 results and hosted an investor 11 conference call. During the call, defendants misrepresented that the de-risked technology had 12 resulted in the efficient and low-risk development of games for next-generation consoles. 13 Defendants also misrepresented that they had learned from and were not repeating the mistakes from 14 the past. On June 24, 2013, EA’s stock price increased 6% on heavy volume of more than 15.6 15 million shares, from $23.83 to $25.41. 16 132. On October 29, 2013, defendants presented EA’s 2Q14 results and hosted an investor 17 conference call. During the call, defendants misrepresented that the quality of Battlefield 4’s game 18 software for launch on the next-generation consoles was head and shoulders above prior game 19 launch software and that such quality resulted from close collaboration with console manufacturers 20 Microsoft and Sony. On October 30, 2013, EA’s stock price increased 7.7% on heavy volume of 21 more than 12.9 million shares, from $24.13 to $26.00. 22 133. On November 15, 2013, customers reported that the launch of Battlefield 4 for PS4 23 was plagued by problems and analysts noted that EA had not, as expected, released sales numbers 24 for the game. In response to this company-specific negative news, EA’s stock price declined 7.3% 25 by the close of trading on heavy volume of more than 11.1 million shares, from $25.96 to $24.06. 26

27 19 28 Average daily volume during the class period was approximately 4.5 million shares.

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 46 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 50 of 60

1 134. On December 3, 2013, after market close, defendants represented that they had 2 avoided the pitfalls that had befallen prior launches and were planning for future innovation. On 3 December 4, 2013, EA’s stock price increased 3.7%, from $21.54 to $22.34. 4 135. On December 4, 2013, defendants revealed that the severity of the bugs plaguing 5 Battlefield 4 would require DICE to cease all future projects until the game was fixed. EA's stock 6 price declined 6% on December 5, 2013, from $22.34 to $21.01 per share, on heavy volume of more 7 than 12.8 million shares, as the stock price completed a 33% fall from the Class Period high.20

8 CLASS ACTION ALLEGATIONS AND THE FRAUD-ON-THE-MARKET PRESUMPTION 9 136. Plaintiffs bring this action as a class action pursuant to Rule 23 of the Federal Rules 10 of Civil Procedure on behalf of all persons who purchased EA common stock on the open market 11 during the Class Period, and were damaged thereby (the “Class”). Excluded from the Class are 12 defendants, directors and officers of EA and their families and affiliates. 13 137. The members of the Class are so numerous that joinder of all members is 14 impracticable. During the Class Period, there were more than 300 million outstanding shares owned 15 by thousands of persons. Thus, the disposition of their claims in a class action will provide 16 substantial benefits to the parties and the Court. 17 138. There is a well-defined community of interest in the questions of law and fact 18 involved in this case. Questions of law and fact common to the members of the Class predominate 19 over questions that may affect individual Class members include: 20 (a) Whether the federal securities laws were violated by defendants; 21 (b) Whether defendants engaged in fraudulent conduct and omitted and/or 22 misrepresented material facts; 23 (c) Whether defendants’ statements omitted material facts necessary to make the 24 statements made, in light of the circumstances under which they were made, not misleading; 25 26

20 27 EA’s stock price recovered somewhat during the PSLRA 90-day limitation on damages. Share price recovery, however, does not negate plaintiffs’ showing of loss causation. Rosado v. China 28 N.E. Petroleum Holdings, Ltd., 692 F.3d 34, 38-40 (2d Cir. 2012).

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 47 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 51 of 60

1 (d) Whether defendants knew or recklessly disregarded that their statements were 2 materially false and misleading; 3 (e) Whether the prices of EA common stock were artificially inflated; 4 (f) Whether defendants’ fraudulent conduct, misrepresentations and omissions 5 caused Class members to suffer economic losses, i.e., damages; and 6 (g) The extent of damage sustained by Class members and the appropriate 7 measure of damages. 8 139. Plaintiffs’ claims are typical of those of the Class because plaintiffs and the Class 9 purchased EA securities during the Class Period and sustained damages from defendants’ wrongful 10 conduct. Plaintiffs will adequately protect the interests of the Class and have retained counsel who 11 are experienced in class action securities litigation. Plaintiffs have no interests that conflict with 12 those of the Class. 13 140. A class action is superior to other available methods for the fair and efficient 14 adjudication of this controversy. A class action will achieve economies of time, effort and expense 15 and provide uniformity of decision to the similarly situated members of the Class without sacrificing 16 procedural fairness or bringing about other undesirable results. Class members have not indicated an 17 interest in prosecuting separate actions; none have been filed. The number of Class members and the 18 relatively small amounts at stake for individual Class members make separate suits impracticable. 19 No difficulties are likely to be encountered in the management of this action as a class action. 20 141. In addition, a class action is superior to other methods of fairly and efficiently 21 adjudicating this controversy because the questions of law and fact common to the Class 22 predominate over any questions affecting only individual Class members. Although individual Class 23 members have suffered disparate damages, the fraudulent scheme and the misrepresentations and 24 omissions causing damages are common to all Class members. Further, there are no individual 25 issues of reliance that could make this action unsuited for treatment as a class action because all 26 Class members relied on the integrity of the market and are entitled to the fraud-on-the-market 27 presumption of reliance. 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 48 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 52 of 60

1 142. The market for EA’s securities was open, well-developed and efficient at all relevant 2 times. EA’s stock met the requirements for listing, and was listed and actively traded on the 3 NASDAQ, a highly efficient and automated market. As a regulated issuer, EA filed periodic public 4 reports with the SEC and the NASDAQ. EA regularly communicated with public investors via 5 established market communication mechanisms, including through regular disseminations of press 6 releases on the national circuits of major newswire services and through other wide-ranging public 7 disclosures, such as communications with the financial press and other similar reporting services. 8 143. As alleged herein, the change in the price of EA’s stock – compared to the changes in 9 the peer group and NASDAQ – in response to the release of unexpected material positive and 10 negative information about the Company shows there was a cause-and-effect relationship between 11 the public release of the unexpected information about EA and the price movement in the 12 Company’s stock. Numerous analysts followed EA, attended the Company’s conference calls and 13 issued reports throughout the Class Period. Numerous National Association of Securities Dealers 14 member firms were active market makers in EA stock throughout the Class Period. According to the 15 Company, it was eligible to register securities on Form S-3 during the Class Period. 16 144. As a result of the foregoing, the market for EA common stock promptly digested 17 current information regarding EA from all publicly available sources and reflected such information 18 in the Company’s stock price. Under these circumstances, all purchasers of EA securities during the 19 Class Period suffered similar injury through their purchases of EA stock at artificially inflated prices 20 and the subsequent revelations concerning declines in price, and a presumption of reliance applies.

21 COUNT I 22 For Violation of Section 10(b) of the 1934 Act and Rule 10b-5 Against All Defendants Except Jorgensen 23 145. Plaintiffs incorporate ¶¶1-144 by reference. 24 146. During the Class Period, EA and the individual defendants disseminated or approved 25 the false statements specified above, which they knew or recklessly disregarded were misleading in 26 that they contained misrepresentations and failed to disclose material facts necessary in order to 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 49 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 53 of 60

1 make the statements made, in light of the circumstances under which they were made, not 2 misleading. 3 147. EA and the individual defendants violated §10(b) of the 1934 Act and Rule 10b-5 in 4 that they (a) employed devices, schemes and artifices to defraud; (b) made untrue statements of 5 material facts or omitted to state material facts necessary in order to make the statements made, in 6 light of the circumstances under which they were made, not misleading; or (c) engaged in acts, 7 practices and a course of business that operated as a fraud or deceit upon plaintiffs and others 8 similarly situated in connection with their purchases of EA common stock during the Class Period. 9 148. Plaintiffs and the Class have suffered damages in that, in reliance on the integrity of 10 the market, they paid artificially-inflated prices for EA common stock. Plaintiffs and the Class 11 would not have purchased EA common stock at the prices they paid, or at all, if they had been aware 12 that the market price had been artificially and falsely inflated by EA’s and the individual defendants’ 13 misleading statements.

14 COUNT II 15 For Violation of Section 20(a) of the 1934 Act Against Defendants Wilson, Jorgensen, Moore and Gibeau 16 149. Plaintiffs incorporate ¶¶1-148 by reference. 17 150. Defendants Wilson, Jorgensen, Moore and Gibeau acted as controlling persons of EA 18 within the meaning of §20(a) of the 1934 Act as alleged herein. By virtue of their high-level 19 positions, participation in and awareness of the Company’s operations and intimate knowledge of the 20 false statements and omissions made by EA and disseminated to the investing public, defendants had 21 the power to influence and control and did influence and control, directly or indirectly, the decision 22 making of the Company, including the content and dissemination of the various statements that 23 plaintiffs contend are false and misleading. Each of these defendants participated in conference calls 24 with investors and were provided with or had unlimited access to copies of the Company’s reports, 25 press releases, public filings and other statements, alleged by plaintiffs to be misleading prior to 26 and/or shortly after these statements were issued, and had the ability to prevent the issuance of the 27 statements or cause the statements to be corrected. 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 50 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 54 of 60

1 151. Each of these defendants had direct and supervisory involvement in the day-to-day 2 operations of the Company and therefore had the power to control or influence the statements 3 regarding Battlefield 4’s development and launch and the prospects for EA’s game development for 4 next-generation consoles that give rise to the securities violations as alleged herein and exercised the 5 same. Furthermore, throughout the Class Period, these defendants had access to bug-tracking 6 information and other internal reports regarding Battlefield 4’s development and to the DICE 7 developers who were tasked with preparing Battlefield 4 for its launch. 8 152. As set forth above, EA and the individual defendants violated §10(b) of the 1934 Act 9 and Rule 10b-5 by their acts and omissions as alleged in this complaint. By virtue of their positions 10 as controlling persons, defendants Wilson, Jorgensen, Moore and Gibeau are liable pursuant to 11 §20(a) of the 1934 Act. As a direct and proximate result of defendants’ wrongful conduct, plaintiffs 12 and other members of the Class suffered damages in connection with their purchases of the 13 Company’s publicly-traded securities during the Class Period.

14 PRAYER FOR RELIEF 15 WHEREFORE, plaintiffs pray for judgment as follows: 16 A. Declaring this action to be a proper class action pursuant to Federal Rule of Civil 17 Procedure 23; 18 B. Awarding plaintiffs and the members of the Class damages, including interest; 19 C. Awarding plaintiffs reasonable costs and attorneys’ fees; and 20 D. Awarding such equitable or injunctive, or other relief, as the Court may deem just and 21 proper. 22 23 24 25 26 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 51 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 55 of 60

1 JURY DEMAND 2 Plaintiffs demand a trial by jury. 3 DATED: November 18, 2014 ROBBINS GELLER RUDMAN & DOWD LLP 4 SHAWN A. WILLIAMS MATTHEW S. MELAMED 5 EKATERINI M. POLYCHRONOPOULOS

6 7 s/ Shawn A. Williams SHAWN A. WILLIAMS 8 Post Montgomery Center 9 One Montgomery Street, Suite 1800 San Francisco, CA 94104 10 Telephone: 415/288-4545 415/288-4534 (fax) 11 POMERANTZ LLP 12 JEREMY A. LIEBERMAN 600 Third Avenue 13 New York, NY 10016 Telephone: 212/661-1100 14 212/661-8665 (fax)

15 POMERANTZ LLP PATRICK V. DAHLSTROM 16 10 South LaSalle Street, Suite 3505 Chicago, IL 60603 17 Telephone: 312/377-1181 312/377-1184 (fax) 18 Co-Lead Counsel for Plaintiffs 19

20 21 22 23 24 25 26 27 28

983916_2 CONSOLIDATED COMPLAINT FOR VIOLATIONS OF THE FED. SECS. LAWS - 3:13-cv-05837-SI - 52 -

Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 56 of 60 Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 57 of 60 Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 58 of 60 Case 3:13-cv-05837-SI Document 49 Filed 11/18/14 Page 59 of 60

1 CERTIFICATE OF SERVICE 2 I hereby certify that on November 18, 2014, I authorized the electronic filing of the foregoing 3 with the Clerk of the Court using the CM/ECF system which will send notification of such filing to 4 the e-mail addresses denoted on the attached Electronic Mail Notice List, and I hereby certify that I 5 caused to be mailed the foregoing document or paper via the United States Postal Service to the non- 6 CM/ECF participants indicated on the attached Manual Notice List. 7 I certify under penalty of perjury under the laws of the United States of America that the 8 foregoing is true and correct. Executed on November 18, 2014. 9 s/ Shawn A. Williams 10 SHAWN A. WILLIAMS

11 ROBBINS GELLER RUDMAN & DOWD LLP 12 Post Montgomery Center One Montgomery Street, Suite 1800 13 San Francisco, CA 94104 Telephone: 415/288-4545 14 415/288-4534 (fax) E-mail: [email protected] 15

16 17 18 19 20 21 22 23 24 25 26 27 28

983916_2

CAND-ECF- Page 1 of 1 Mailing InformationCase 3:13-cv-05837-SI for a Case Document 3:13-cv 49-05837-SI Filed 11/18/14 Kelly Page v. 60Electronic of 60 Arts, Inc. et al

Electronic Mail Notice List

The following are those who are currently on the list to receive e-mail notices for this case.

• Mary K. Blasy [email protected]

• Patrick V. Dahlstrom [email protected]

• Lionel Z. Glancy [email protected],[email protected],[email protected]

• Michael M. Goldberg [email protected],[email protected],[email protected],[email protected]

• James Neil Kramer [email protected],[email protected]

• Jeremy A Lieberman [email protected],[email protected]

• Matthew Seth Melamed [email protected],[email protected],[email protected]

• Ekaterini Maria Polychronopoulos [email protected]

• Lesley F. Portnoy [email protected]

• Robert Vincent Prongay [email protected],[email protected],[email protected],[email protected]

• Alexander K Talarides [email protected]

• Robert P. Varian [email protected],[email protected],[email protected],[email protected],[email protected]

• Shawn A. Williams [email protected],[email protected],[email protected],[email protected],[email protected]

Manual Notice List

The following is the list of attorneys who are not on the list to receive e-mail notices for this case (who therefore require manual noticing). You may wish to use your mouse to select and copy this list into your word processing program in order to create notices or labels for these recipients.

• (No manual recipients)

https://ecf.cand.uscourts.gov/cgi-bin/MailList.pl?60162336118996-L_1_0-1 11/18/2014